UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 ________________________________________________________

FORM 10-Q

 ________________________________________________________

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 29, 2018

OR

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission File Number: 1-8089

DANAHER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	59-1995548
(State of Incorporation)	(I.R.S. Employer Identification number)
2200 Pennsylvania Avenue, N.W., Suite 800W Washington, D.C.	20037-1701
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: 202-828-0850

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨
Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)    Yes  ¨    No  ý

The number of shares of common stock outstanding at July 13, 2018 was 699,754,843.

DANAHER CORPORATION

INDEX

FORM 10-Q

		Page
PART I -	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets	1
	Consolidated Condensed Statements of Earnings	2
	Consolidated Condensed Statements of Comprehensive Income	3
	Consolidated Condensed Statement of Stockholders’ Equity	4
	Consolidated Condensed Statements of Cash Flows	5
	Notes to Consolidated Condensed Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
PART II -	OTHER INFORMATION
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 6.	Exhibits	47
	Signatures	48

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

($ and shares in millions, except per share amount)

(unaudited)

	June 29, 2018			December 31, 2017
ASSETS
Current assets:
Cash and equivalents	$	904.0		$	630.3
Trade accounts receivable, net	3,296.6			3,521.8
Inventories:
Finished goods	1,073.1			982.5
Work in process	316.6			309.7
Raw materials	590.8			548.6
Total inventories	1,980.5			1,840.8
Prepaid expenses and other current assets	732.0			857.1
Total current assets	6,913.1			6,850.0
Property, plant and equipment, net of accumulated depreciation of $2,689.4 and $2,519.4, respectively	2,492.9			2,454.6
Other long-term assets	547.4			538.3
Goodwill	25,916.5			25,138.6
Other intangible assets, net	12,185.9			11,667.1
Total assets	$	48,055.8		$	46,648.6
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	175.1		$	194.7
Trade accounts payable	1,587.0			1,509.9
Accrued expenses and other liabilities	2,843.3			3,087.7
Total current liabilities	4,605.4			4,792.3
Other long-term liabilities	5,080.4			5,161.1
Long-term debt	11,145.6			10,327.4
Stockholders’ equity:
Common stock - $0.01 par value, 2.0 billion shares authorized; 816.0 and 812.5 issued; 699.7 and 696.6 outstanding, respectively	8.2			8.1
Additional paid-in capital	5,706.1			5,538.2
Retained earnings	23,977.2			22,806.1
Accumulated other comprehensive income (loss)	(2,479.2		)	(1,994.2		)
Total Danaher stockholders’ equity	27,212.3			26,358.2
Noncontrolling interests	12.1			9.6
Total stockholders’ equity	27,224.4			26,367.8
Total liabilities and stockholders’ equity	$	48,055.8		$	46,648.6

See the accompanying Notes to the Consolidated Condensed Financial Statements.

1

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS

($ and shares in millions, except per share amounts)

(unaudited)

	Three-Month Period Ended						Six-Month Period Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	4,981.0		$	4,510.1		$	9,676.4		$	8,715.8
Cost of sales	(2,163.9		)	(2,027.8		)	(4,215.7		)	(3,899.2		)
Gross profit	2,817.1			2,482.3			5,460.7			4,816.6
Operating costs:
Selling, general and administrative expenses	(1,637.9		)	(1,522.3		)	(3,239.8		)	(2,972.2		)
Research and development expenses	(311.7		)	(283.3		)	(610.4		)	(550.7		)
Operating profit	867.5			676.7			1,610.5			1,293.7
Nonoperating income (expense):
Other income, net	8.3			7.0			16.1			13.9
Interest expense	(43.2		)	(40.7		)	(82.3		)	(81.0		)
Interest income	2.5			1.8			3.9			3.4
Earnings from continuing operations before income taxes	835.1			644.8			1,548.2			1,230.0
Income taxes	(161.3		)	(87.5		)	(307.8		)	(188.9		)
Net earnings from continuing operations	673.8			557.3			1,240.4			1,041.1
Earnings from discontinued operations, net of income taxes	—			—			—			22.3
Net earnings	$	673.8		$	557.3		$	1,240.4		$	1,063.4
Net earnings per share from continuing operations:
Basic	$	0.96		$	0.80		$	1.77		$	1.50
Diluted	$	0.95		$	0.79		$	1.75		$	1.48
Net earnings per share from discontinued operations:
Basic	$	—		$	—		$	—		$	0.03
Diluted	$	—		$	—		$	—		$	0.03
Net earnings per share:
Basic	$	0.96		$	0.80		$	1.77		$	1.53
Diluted	$	0.95		$	0.79		$	1.75		$	1.51
Average common stock and common equivalent shares outstanding:
Basic	700.2			695.4			699.4			694.9
Diluted	709.5			705.4			709.5			705.5

See the accompanying Notes to the Consolidated Condensed Financial Statements.

2

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

($ in millions)

(unaudited)

	Three-Month Period Ended					Six-Month Period Ended
	June 29, 2018			June 30, 2017		June 29, 2018			June 30, 2017
Net earnings	$	673.8		$	557.3	$	1,240.4		$	1,063.4
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments	(641.1		)	274.9		(347.0		)	579.2
Pension and postretirement plan benefit adjustments	6.7			4.9		13.8			9.8
Unrealized (loss) gain on available-for-sale securities adjustments	(0.1		)	10.9		(0.6		)	18.2
Total other comprehensive income (loss), net of income taxes	(634.5		)	290.7		(333.8		)	607.2
Comprehensive income	$	39.3		$	848.0	$	906.6		$	1,670.6

See the accompanying Notes to the Consolidated Condensed Financial Statements.

3

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY

($ and shares in millions)

(unaudited)

	Common Stock			Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
	Shares	Amount
Balance, December 31, 2017	812.5	$	8.1	$	5,538.2	$	22,806.1		$	(1,994.2	)	$	9.6
Adoption of accounting standards	—	—		—		154.5			(151.2		)	—
Balance, January 1, 2018	812.5	8.1		5,538.2		22,960.6			(2,145.4		)	9.6
Net earnings	—	—		—		1,240.4			—			—
Other comprehensive income (loss)	—	—		—		—			(333.8		)	—
Dividends declared	—	—		—		(223.8		)	—			—
Common stock-based award activity	2.8	0.1		127.9		—			—			—
Common stock issued in connection with acquisitions	0.2	—		23.9		—			—			—
Common stock issued in connection with LYONs’ conversions, including tax benefit of $4.2	0.5	—		16.1		—			—			—
Change in noncontrolling interests	—	—		—		—			—			2.5
Balance, June 29, 2018	816.0	$	8.2	$	5,706.1	$	23,977.2		$	(2,479.2	)	$	12.1

See the accompanying Notes to the Consolidated Condensed Financial Statements.

4

DANAHER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

($ in millions)

(unaudited)

	Six-Month Period Ended
	June 29, 2018			June 30, 2017
Cash flows from operating activities:
Net earnings	$	1,240.4		$	1,063.4
Less: earnings from discontinued operations, net of income taxes	—			22.3
Net earnings from continuing operations	1,240.4			1,041.1
Noncash items:
Depreciation	302.0			282.4
Amortization	353.4			326.4
Stock-based compensation expense	73.4			71.4
Restructuring and impairment charges	—			49.3
Change in trade accounts receivable, net	159.6			72.1
Change in inventories	(197.1		)	(45.4		)
Change in trade accounts payable	87.0			(104.1		)
Change in prepaid expenses and other assets	186.2			186.2
Change in accrued expenses and other liabilities	(340.0		)	(308.7		)
Net operating cash provided by continuing operations	1,864.9			1,570.7
Cash flows from investing activities:
Cash paid for acquisitions	(2,067.8		)	(93.9		)
Payments for additions to property, plant and equipment	(291.7		)	(306.5		)
Proceeds from sales of property, plant and equipment	1.4			30.0
Proceeds from sale of investments	22.1			—
All other investing activities	(29.3		)	(2.5		)
Net operating cash used in investing activities	(2,365.3		)	(372.9		)
Cash flows from financing activities:
Proceeds from the issuance of common stock	49.7			35.8
Payment of dividends	(209.3		)	(183.9		)
Payment for purchase of noncontrolling interests	—			(64.4		)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)	1,030.1			(2,387.5		)
Proceeds from borrowings (maturities longer than 90 days)	—			1,684.0
Repayments of borrowings (maturities longer than 90 days)	(3.9		)	(562.4		)
All other financing activities	(16.2		)	(37.3		)
Net operating cash provided by (used in) financing activities	850.4			(1,515.7		)
Effect of exchange rate changes on cash and equivalents	(76.3		)	80.6
Net change in cash and equivalents	273.7			(237.3		)
Beginning balance of cash and equivalents	630.3			963.7
Ending balance of cash and equivalents	$	904.0		$	726.4
Supplemental disclosures:
Cash interest payments	$	65.4		$	58.4
Cash income tax payments	310.4			266.3

See the accompanying Notes to the Consolidated Condensed Financial Statements.

5

DANAHER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. GENERAL

The consolidated condensed financial statements included herein have been prepared by Danaher Corporation (“Danaher” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In this quarterly report, the terms “Danaher” or the “Company” refer to Danaher Corporation, Danaher Corporation and its consolidated subsidiaries or the consolidated subsidiaries of Danaher Corporation, as the context requires. Unless otherwise indicated, all amounts in this quarterly report refer to continuing operations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The Consolidated Condensed Financial Statements included herein should be read in conjunction with the financial statements as of and for the year ended December 31, 2017 and the Notes thereto included in the Company’s 2017 Annual Report on Form 10-K filed on February 21, 2018.

In the opinion of the Company, the accompanying financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position of the Company as of June 29, 2018 and December 31, 2017, its results of operations for the three and six-month periods ended June 29, 2018 and June 30, 2017 and its cash flows for each of the six-month periods then ended. Reclassifications of certain prior year amounts have been made to conform to the current year presentation.

Accounting Standards Recently Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606)which supersedes nearly all existing revenue recognition guidance. Subsequent to the issuance of Topic 606, the FASB clarified the guidance through several Accounting Standard Updates; hereinafter the collection of revenue guidance is referred to as “ASC 606”. The core principle of ASC 606 is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

On January 1, 2018, the Company adopted ASC 606 using the modified retrospective method for all contracts. Results for reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under Topic 605, Revenue Recognition.

The Company recorded a net increase to beginning retained earnings of $3 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain a contract, primarily sales-related commissions, partially offset by the deferral of revenue for unfulfilled performance obligations. The adoption of ASC 606 did not have a significant impact on the Company’s Consolidated Condensed Financial Statements as of and for the three and six-month periods ended June 29, 2018and, as a result, comparisons of revenues and operating profit performance between periods are not affected by the adoption of this ASU. Refer to Note 2 for additional disclosures required by ASC 606.

The Company derives revenues primarily from the sale of Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions products and services. Revenue is recognized when control of the promised products or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606. For equipment, consumables, spare parts and most software licenses sold by the Company, control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership, and where acceptance is not a formality, the customer must have accepted the product or service. The Company’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, the Company primarily transfers control and records revenue for product sales upon shipment. Sales arrangements with delivery terms that are not FOB Shipping Point are not recognized upon shipment and the transfer of control for revenue recognition is evaluated based on the associated shipping terms and customer obligations. If a performance obligation to the customer with respect to a sales transaction remains to be fulfilled following shipment (typically installation or acceptance by the customer), revenue recognition for that performance obligation is deferred until such commitments have been fulfilled. Returns for products sold are estimated and recorded as a reduction of revenue at the time of sale. Customer allowances and rebates, consisting primarily

6

of volume discounts and other short-term incentive programs, are recorded as a reduction of revenue at the time of sale because these allowances reflect a reduction in the transaction price. Product returns, customer allowances and rebates are estimated based on historical experience and known trends. For extended warranty, service, post contract support (“PCS”), software-as-a-service (“SaaS”) and other long-term contracts, control transfers to the customer over the term of the arrangement. Revenue for extended warranty, service, PCS, SaaS and certain software licenses is recognized based upon the period of time elapsed under the arrangement. Revenue for other long-term contracts is generally recognized based upon the cost-to-cost measure of progress, provided that the Company meets the criteria associated with transferring control of the good or service over time.

Certain of the Company’s revenues relate to operating-type lease (“OTL”) arrangements. Leases are outside the scope of ASC 606 and are therefore accounted for in accordance with ASC 840, Leases. Instrument lease revenue for OTL agreements is recognized on a straight-line basis over the life of the lease, and the costs of customer-leased instruments are recorded within property, plant and equipment in the accompanying Consolidated Condensed Balance Sheets and depreciated over the instrument’s estimated useful life. The depreciation expense is reflected in cost of sales in the accompanying Consolidated Condensed Statements of Earnings. The OTLs are generally not cancellable until after an initial term and may or may not require the customer to purchase a minimum number of consumables or tests throughout the contract term. Certain of the Company’s lease contracts are customized for larger customers and often result in complex terms and conditions that typically require significant judgment in applying the criteria used to evaluate whether the arrangement should be considered an OTL or a sales-type lease (“STL”). A sales-type lease would result in earlier recognition of instrument revenue as compared to an OTL.

For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract. The primary method used to estimate standalone selling price is the price observed in standalone sales to customers; however, when prices in standalone sales are not available the Company may use third-party pricing for similar products or services or estimate the standalone selling price. Allocation of the transaction price is determined at the contracts’ inception. The Company does not adjust transaction price for the effects of a significant financing component when the period between the transfer of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. This allocation approach also applies to contracts that include a lease component.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU amends guidance on the classification and measurement of financial instruments, including significant revisions in accounting related to the classification and measurement of investments in equity securities and presentation of certain fair value changes for financial liabilities when the fair value option is elected. The ASU requires equity securities to be measured at fair value with changes in fair value recognized through net earnings and amends certain disclosure requirements associated with the fair value of financial instruments. In the period of adoption, the Company is required to reclassify the unrealized gains/losses on equity securities within accumulated other comprehensive income (loss) to retained earnings. In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments—Overall (Subtopic 825-10), which clarified certain aspects of the previously issued ASU. The ASU was adopted by the Company on January 1, 2018 and did not have a material effect on the Company’s Consolidated Condensed Financial Statements.

In March 2017, the FASB issued ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires employers to disaggregate the service cost component from other components of net periodic benefit costs and to disclose the amounts of net periodic benefit costs that are included in each income statement line item. The standard requires employers to report the service cost component in the same line item as other compensation costs and to report the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. The income statement guidance requires application on a retrospective basis. The ASU was adopted by the Company on January 1, 2018 and as a result operating profit decreased and other income, net increased by $7.0 million and $13.9 million for the three and six-month periods ended June 30, 2017, respectively. Refer to Note 8 for further information on the implementation of this ASU.

The Company measures its pension and postretirement plans’ assets and its obligations that determine the respective plan’s funded status as of the end of the Company’s fiscal year, and recognizes an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in its balance sheet. Changes in the funded status of the plans are recognized in the year in which the changes occur and reported in other comprehensive income (loss). The service cost component of net periodic pension cost is included in cost of sales and selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings and the other components of net periodic pension cost are included in nonoperating income (expense).

7

In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, to address a specific consequence of the Tax Cuts and Jobs Act (“TCJA”) by allowing a reclassification from accumulated other comprehensive income (loss) to retained earnings for stranded tax effects resulting from the TCJA’s reduction of the U.S. federal corporate income tax rate. The standard is effective for all entities for annual periods beginning after December 15, 2018, with early adoption permitted, and is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized.  The Company early adopted this ASU on January 1, 2018 and as a result recorded a net increase to beginning retained earnings and decrease to accumulated other comprehensive income (loss) of $151 million to reclassify the income tax effects of the TCJA on the Company’s U.S. pension plans, available-for-sale debt securities and certain foreign currency losses. The ASU also requires the Company to disclose its policy on accounting for income tax effects in accumulated other comprehensive income (loss). In general, the Company applies the individual item approach with respect to available-for-sale debt securities and the portfolio approach with respect to pension, postretirement benefit plan obligations and currency translation matters.

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118, which allowed SEC registrants to record provisional amounts in earnings for the year ended December 31, 2017 due to the complexities involved in accounting for the enactment of the TCJA. The Company recognized the estimated income tax effects of the TCJA in its 2017 Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin No. 118 (“SAB No. 118”). Refer to Note 9 for further information regarding the provisional amounts recorded by the Company as of December 31, 2017.

Except for the above accounting policy for revenue recognition that was updated as a result of adopting ASC 606 and the policy for pension and postretirement benefit plans that was updated as a result of adopting ASU 2017-07, there have been no changes to the Company’s significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017 that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes.

Accounting Standards Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses rather than incurred losses to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. The ASU is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements. Currently, the Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on trade accounts receivable and the recognition of credit losses.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and a lease liability for all leases with terms greater than 12 months. The standard also requires disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting applied by a lessor is largely unchanged from that applied under the current standard. The standard must be adopted using a modified retrospective transition approach and provides for certain practical expedients. The ASU is effective for public entities for fiscal years beginning after December 15, 2018, with early adoption permitted. In September 2017 and January 2018, the FASB issued ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842), andASU No. 2018-01, Leases (Topic 842), Land Easement Practical Expedient for Transition to Topic 842, which provided additional implementation guidance on the previously issued ASU. Management has not yet completed its assessment of the impact of the new standard on the Company’s Consolidated Financial Statements. The Company is in the process of implementation and currently believes that the most notable impact to its financial statements upon the adoption of this ASU will be the recognition of a material right-of-use asset and a lease liability for its real estate and equipment leases.

8

Accumulated Other Comprehensive Income (Loss)—Accumulated other comprehensive income (loss) refers to certain gains and losses that under U.S. GAAP are included in comprehensive income (loss) but are excluded from net earnings as these amounts are initially recorded as an adjustment to stockholders’ equity. The changes in accumulated other comprehensive income (loss) by component are summarized below ($ in millions). Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.

	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Three-Month Period Ended June 29, 2018:
Balance, March 30, 2018	$	(1,171.8	)	$	(671.3	)		$	(1.6	)	$	(1,844.7	)
Other comprehensive income (loss) before reclassifications:
Decrease	(641.1		)	—				(0.1		)	(641.2		)
Other comprehensive income (loss) before reclassifications, net of income taxes	(641.1		)	—				(0.1		)	(641.2		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			8.8			(a)	—			8.8
Income tax impact	—			(2.1		)		—			(2.1		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			6.7				—			6.7
Net current period other comprehensive income (loss), net of income taxes	(641.1		)	6.7				(0.1		)	(634.5		)
Balance, June 29, 2018	$	(1,812.9	)	$	(664.6	)		$	(1.7	)	$	(2,479.2	)
For the Three-Month Period Ended June 30, 2017:
Balance, March 31, 2017	$	(2,093.9	)	$	(637.3	)		$	26.0		$	(2,705.2	)
Other comprehensive income (loss) before reclassifications:
Increase	274.9			—				17.4			292.3
Income tax impact	—			—				(6.5		)	(6.5		)
Other comprehensive income (loss) before reclassifications, net of income taxes	274.9			—				10.9			285.8
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			7.6			(a)	—			7.6
Income tax impact	—			(2.7		)		—			(2.7		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			4.9				—			4.9
Net current period other comprehensive income (loss), net of income taxes	274.9			4.9				10.9			290.7
Balance, June 30, 2017	$	(1,819.0	)	$	(632.4	)		$	36.9		$	(2,414.5	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 8 for additional details.

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	Foreign Currency Translation Adjustments			Pension & Postretirement Plan Benefit Adjustments				Unrealized Gain (Loss) on Available-For-Sale Securities Adjustments			Total
For the Six-Month Period Ended June 29, 2018:
Balance, December 31, 2017	$	(1,422.1	)	$	(571.2	)		$	(0.9	)	$	(1,994.2	)
Adoption of accounting standards	(43.8		)	(107.2		)		(0.2		)	(151.2		)
Balance, January 1, 2018	(1,465.9		)	(678.4		)		(1.1		)	(2,145.4		)
Other comprehensive income (loss) before reclassifications:
Decrease	(347.0		)	—				(0.8		)	(347.8		)
Income tax impact	—			—				0.2			0.2
Other comprehensive income (loss) before reclassifications, net of income taxes	(347.0		)	—				(0.6		)	(347.6		)
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			18.1			(a)	—			18.1
Income tax impact	—			(4.3		)		—			(4.3		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			13.8				—			13.8
Net current period other comprehensive income (loss), net of income taxes	(347.0		)	13.8				(0.6		)	(333.8		)
Balance, June 29, 2018	$	(1,812.9	)	$	(664.6	)		$	(1.7	)	$	(2,479.2	)
For the Six-Month Period Ended June 30, 2017:
Balance, December 31, 2016	$	(2,398.2	)	$	(642.2	)		$	18.7		$	(3,021.7	)
Other comprehensive income (loss) before reclassifications:
Increase	579.2			—				29.1			608.3
Income tax impact	—			—				(10.9		)	(10.9		)
Other comprehensive income (loss) before reclassifications, net of income taxes	579.2			—				18.2			597.4
Amounts reclassified from accumulated other comprehensive income (loss):
Increase	—			15.2			(a)	—			15.2
Income tax impact	—			(5.4		)		—			(5.4		)
Amounts reclassified from accumulated other comprehensive income (loss), net of income taxes	—			9.8				—			9.8
Net current period other comprehensive income (loss), net of income taxes	579.2			9.8				18.2			607.2
Balance, June 30, 2017	$	(1,819.0	)	$	(632.4	)		$	36.9		$	(2,414.5	)

^(a) This accumulated other comprehensive income (loss) component is included in the computation of net periodic pension cost. Refer to Note 8 for additional details.

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NOTE 2. REVENUE

The following tables present the Company’s revenues disaggregated by geographical region and revenue type for the three and six-month periods ended June 29, 2018 ($ in millions). Sales taxes and other usage-based taxes are excluded from revenues. The Company defines high-growth markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure which includes Eastern Europe, the Middle East, Africa, Latin America and Asia (with the exception of Japan and Australia). The Company defines developed markets as all markets of the world that are not high-growth markets.

	Three-Month Period Ended June 29, 2018
	Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total
Geographical region:
North America	$	578.0	$	578.7	$	346.1	$	450.7	$	1,953.5
Western Europe	449.5		288.7		170.5		263.2		1,171.9
Other developed markets	138.5		91.3		47.1		32.3		309.2
High-growth markets	439.2		592.2		169.7		345.3		1,546.4
Total	$	1,605.2	$	1,550.9	$	733.4	$	1,091.5	$	4,981.0
Revenue type:
Recurring	$	1,056.0	$	1,311.0	$	547.3	$	574.6	$	3,488.9
Nonrecurring	549.2		239.9		186.1		516.9		1,492.1
Total	$	1,605.2	$	1,550.9	$	733.4	$	1,091.5	$	4,981.0

	Six-Month Period Ended June 29, 2018
	Life Sciences		Diagnostics		Dental		Environmental & Applied Solutions		Total
Geographical region:
North America	$	1,058.4	$	1,186.1	$	637.4	$	869.0	$	3,750.9
Western Europe	899.4		599.1		346.1		528.0		2,372.6
Other developed markets	283.4		183.5		91.0		63.9		621.8
High-growth markets	840.0		1,101.9		331.5		657.7		2,931.1
Total	$	3,081.2	$	3,070.6	$	1,406.0	$	2,118.6	$	9,676.4
Revenue type:
Recurring	$	2,026.4	$	2,619.5	$	1,035.3	$	1,131.6	$	6,812.8
Nonrecurring	1,054.8		451.1		370.7		987.0		2,863.6
Total	$	3,081.2	$	3,070.6	$	1,406.0	$	2,118.6	$	9,676.4

The Company sells equipment to customers as well as consumables, spare parts, software licenses and services that customers purchase on a recurring basis. Consumables are typically critical to the use of the equipment and are used on a one-time or limited basis, requiring frequent replacement in the customer’s operating cycle. Examples of these consumables include reagents used in diagnostic tests, filters used in filtration, separation and purification processes and cartridges for marking and coding equipment. Additionally, some of the Company’s consumables are used on a standalone basis, such as dental implants and water treatment solutions. The Company separates its goods and services between those sold on a recurring basis and those sold on a nonrecurring basis. Recurring revenue includes revenue from consumables, services, spare parts, software licenses recognized over time, SaaS, sales-and-usage based royalties and OTLs. Nonrecurring revenue includes sales from equipment, software licenses recognized at a point in time and STLs. OTLs and STLs are included in the above revenue amounts. For the three and six-month periods ended June 29, 2018, revenue accounted for under Topic 840, Leases was $96 million and $193 million, respectively.

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Remaining Performance Obligations

Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancelable purchase orders, the non-lease portion of minimum purchase commitments under long-term consumable supply arrangements, extended warranty, service and PCS contracts, SaaS and other long-term contracts. Remaining performance obligations do not include revenue from contracts with customers with an original term of one year or less, revenue from long-term consumable supply arrangements with no minimum purchase requirements or revenue expected from purchases made in excess of the minimum purchase requirements or revenue from equipment leased to customers. While the remaining performance obligation disclosure is similar in concept to backlog, the definition of remaining performance obligations excludes leases and contracts that provide the customer with the right to cancel or terminate for convenience with no substantial penalty, even if historical experience indicates the likelihood of cancellation or termination is remote. Additionally, the Company has elected to exclude contracts with customers with an original term of one year or less from remaining performance obligations while these contracts are included within backlog.

As of June 29, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $1.7 billion. The Company expects to recognize revenue on approximately 45% of the remaining performance obligations over the next 12 months, 27% recognized over the subsequent 12 months, and the remainder recognized thereafter.

Contract Balances

The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, customer deposits and billings in excess of revenue recognized (contract liabilities) on the Consolidated Condensed Balance Sheets. In addition, the Company defers certain costs incurred to obtain a contract (contract costs).

Contract assets—Most of the Company’s long-term contracts are billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. Often this results in billing occurring subsequent to revenue recognition resulting in contract assets. Contract assets are generally classified as other current assets in the Consolidated Condensed Balance Sheet. The balance of contract assets as of June 29, 2018 and at the date of adoption of ASC 606 were $98 million and $114 million, respectively.

Contract liabilities—The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the Consolidated Condensed Balance Sheet based on the timing of when the Company expects to recognize revenue. As of June 29, 2018 and at the date of adoption of ASC 606, contract liabilities were $791 million and $783 million, respectively, and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Consolidated Condensed Balance Sheet. The increase in the contract liability balance during the six-month period ended June 29, 2018 is primarily as a result of cash payments received in advance of satisfying performance obligations and acquisitions, partially offset by $424 million of revenue recognized during the period that was included in the contract liability balance at the date of adoption and foreign currency exchange.

Contract costs—The Company capitalizes certain direct incremental costs incurred to obtain a contract, typically sales-related commissions, where the amortization period for the related asset is greater than one year. These costs are amortized over the contract term or a longer period, generally the expected life of the customer relationship if renewals are expected and the renewal commission is not commensurate with the initial commission. Contract costs are classified as current or long-term other assets in the Consolidated Condensed Balance Sheet based on the timing of when the Company expects to recognize the expense and are generally amortized into earnings on a straight-line basis (which is consistent with the transfer of control for the related goods or services). Management assesses these costs for impairment at least quarterly and as “triggering” events occur that indicate it is more likely than not that an impairment exists. The balance of contract costs as of June 29, 2018 and at the date of adoption were not significant. Amortization expense for the three and six-month periods ended June 29, 2018, was also not significant. The costs to obtain a contract where the amortization period for the related asset is one year or less are expensed as incurred and recorded within selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings.

Contract assets, liabilities and costs are reported on the accompanying Consolidated Condensed Balance Sheet on a contract-by-contract basis.

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NOTE 3. ACQUISITIONS

For a description of the Company’s acquisition activity for the year ended December 31, 2017 reference is made to the financial statements as of and for the year ended December 31, 2017 and Note 2 thereto included in the Company’s 2017 Annual Report.

The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses, anticipated opportunities for synergies from the elimination of redundant facilities and staffing and use of each party’s respective, existing commercial infrastructure to cost-effectively expand sales of the other party’s products and services, and the complementary strategic fit and resulting synergies these businesses bring to existing operations.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. In the months after closing, as the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Company is continuing to evaluate certain pre-acquisition contingencies associated with certain of its 2017 and 2018 acquisitions and is also in the process of obtaining valuations of certain property, plant and equipment, acquired intangible assets and certain acquisition-related liabilities in connection with these acquisitions. The Company will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

On April 13, 2018, the Company acquired Integrated DNA Technologies, Inc. (“IDT”), a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a purchase price of approximately$2.1 billion, net of cash acquired.IDT had revenues of approximately$260 million in 2017, and is now part of the Company’s Life Sciences segment.

The Company financed the acquisition of IDT with available cash and proceeds from the issuance of commercial paper. The Company preliminarily recorded approximately $1.1 billion of goodwill related to the IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses.

The following summarizes the estimated fair values of the assets acquired and liabilities assumed related to the IDT acquisition:

Trade accounts receivable	$	36.1
Inventories	15.6
Property, plant and equipment	108.8
Goodwill	1,077.5
Other intangible assets, primarily customer relationships, trade names and technology	957.0
Trade accounts payable	(5.5		)
Other assets and liabilities, net	(97.8		)
Net assets acquired	2,091.7
Less: noncash consideration	(23.9		)
Net cash consideration	$	2,067.8

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Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the 2018 and 2017 acquisitions as if they had occurred as of January 1, 2017. The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):

	Three-Month Period Ended				Six-Month Period Ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Sales	$	4,990.2	$	4,605.9	$	9,750.1	$	8,916.1
Net earnings from continuing operations	678.3		546.1		1,234.3		1,018.3
Diluted net earnings per share from continuing operations	0.96		0.77		1.74		1.44

In the three and six-month periods ended June 29, 2018, unaudited pro forma earnings set forth above were adjusted to exclude the $1 million pretax impact of nonrecurring acquisition date fair value adjustments to inventory related to the 2018 acquisition of IDT and the 2017 unaudited pro forma revenue and earnings set forth above were adjusted to include the impact of these same fair value adjustments as if the acquisition had occurred on January 1, 2017.

In addition, acquisition-related transaction costs of $15 million in 2018 associated with the IDT acquisition were excluded from pro forma earnings in both 2018 and 2017.

NOTE 4. DISCONTINUED OPERATIONS

On July 2, 2016 (the “Distribution Date”), the Company completed the separation (the “Separation”) of Fortive Corporation (“Fortive”). For additional details on the Separation reference is made to the financial statements as of and for the year ended December 31, 2017 and Note 3 thereto included in the Company’s 2017 Annual Report. The accounting requirements for reporting the Separation of Fortive as a discontinued operation were met when the Separation was completed. Accordingly, the accompanying Consolidated Condensed Financial Statements for all periods presented reflect this business as a discontinued operation.

In the six-month period ended June 30, 2017, the Company recorded a $22 million income tax benefit related to the release of previously provided reserves associated with uncertain tax positions on certain Danaher tax returns which were jointly filed with Fortive entities. These reserves were released due to the expiration of statutes of limitations for those returns. This income tax benefit was included in earnings from discontinued operations in the accompanying Consolidated Condensed Statement of Earnings.

NOTE 5. GOODWILL

The following is a rollforward of the Company’s goodwill ($ in millions):

Balance, December 31, 2017	$	25,138.6
Attributable to 2018 acquisitions	1,077.5
Adjustments due to finalization of purchase price allocations	8.5
Foreign currency translation and other	(308.1		)
Balance, June 29, 2018	$	25,916.5

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The carrying value of goodwill by segment is summarized as follows ($ in millions):

	June 29, 2018		December 31, 2017
Life Sciences	$	13,283.7	$	12,335.5
Diagnostics	6,984.6		7,079.5
Dental	3,343.7		3,370.0
Environmental & Applied Solutions	2,304.5		2,353.6
Total	$	25,916.5	$	25,138.6

The Company has not identified any “triggering” events which indicate an impairment of goodwill in the six-month period ended June 29, 2018.

NOTE 6. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation. Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):

	Quoted Prices in Active Market (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
June 29, 2018:
Assets:
Available-for-sale debt securities	$	—	$	41.5	$	—	$	41.5
Liabilities:
Deferred compensation plans	—		62.0		—		62.0
December 31, 2017:
Assets:
Available-for-sale debt securities	$	—	$	45.4	$	—	$	45.4
Liabilities:
Deferred compensation plans	—		62.9		—		62.9

Available-for-sale debt securities, which are included in other long-term assets in the accompanying Consolidated Condensed Balance Sheets, are measured at quoted prices reported by investment brokers and dealers based on the underlying terms of the security and comparison to similar securities traded on an active market.

The Company has established nonqualified deferred compensation programs that permit officers, directors and certain management employees to defer a portion of their compensation, on a pretax basis, until at or after their termination of employment (or board service, as applicable). All amounts deferred under such plans are unfunded, unsecured obligations of the Company and are presented as a component of the Company’s compensation and benefits accrual included in other long-term liabilities in the accompanying Consolidated Condensed Balance Sheets. Participants may choose among alternative earning rates for the amounts they defer, which are primarily based on investment options within the Company’s 401(k) program (except that the earnings rates for amounts deferred by the Company’s directors and amounts contributed unilaterally by the Company are entirely based on changes in the value of the Company’s common stock). Changes in the deferred

15

compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts, which are based on the applicable earnings rates.

Fair Value of Financial Instruments

The carrying amounts and fair values of the Company’s financial instruments were as follows ($ in millions):

	June 29, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Available-for-sale debt securities	$	41.5	$	41.5	$	45.4	$	45.4
Liabilities:
Notes payable and current portion of long-term debt	175.1		175.1		194.7		194.7
Long-term debt	11,145.6		11,494.5		10,327.4		10,847.1

As of June 29, 2018 and December 31, 2017, available-for-sale debt securities were categorized as Level 2, as indicated above, and short and long-term borrowings were categorized as Level 1.

The fair value of long-term borrowings was based on quoted market prices. The difference between the fair value and the carrying amounts of long-term borrowings (other than the Company’s Liquid Yield Option Notes due 2021 (the “LYONs”)) is attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing. In the case of the LYONs, differences in the fair value from the carrying value are attributable to changes in the price of the Company’s common stock due to the LYONs’ conversion features. The fair values of borrowings with original maturities of one year or less, as well as cash and cash equivalents, trade accounts receivable, net and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

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NOTE 7. FINANCING

As of June 29, 2018, the Company was in compliance with all of its debt covenants. The components of the Company’s debt were as follows ($ in millions):

	June 29, 2018		December 31, 2017
U.S. dollar-denominated commercial paper	$	—	$	436.9
Euro-denominated commercial paper (€2.9 billion and €1.7 billion, respectively)	3,355.3		1,993.9
1.65% senior unsecured notes due 2018 (the “2018 U.S. Notes”)	499.8		499.2
1.0% senior unsecured notes due 2019 (€600.0 million aggregate principal amount) (the “2019 Euronotes”)	699.4		718.4
2.4% senior unsecured notes due 2020	498.1		497.7
5.0% senior unsecured notes due 2020 (the “2020 Assumed Pall Notes”)	390.5		394.6
Zero-coupon Liquid Yield Option Notes (LYONs) due 2021	57.9		69.1
0.352% senior unsecured notes due 2021 (¥30.0 billion aggregate principal amount) (the “2021 Yen Notes”)	270.3		265.5
1.7% senior unsecured notes due 2022 (€800.0 million aggregate principal amount) (the “2022 Euronotes”)	930.0		955.6
Floating rate senior unsecured notes due 2022 (€250.0 million aggregate principal amount) (the “Floating Rate 2022 Euronotes”)	291.0		299.1
0.5% senior unsecured bonds due 2023 (CHF 540.0 million aggregate principal amount) (the “2023 CHF Bonds”)	547.1		555.5
2.5% senior unsecured notes due 2025 (€800.0 million aggregate principal amount) (the “2025 Euronotes”)	929.7		955.6
3.35% senior unsecured notes due 2025	496.5		496.3
0.3% senior unsecured notes due 2027 (¥30.8 billion aggregate principal amount) (the “2027 Yen Notes”)	277.1		272.2
1.2% senior unsecured notes due 2027 (€600.0 million aggregate principal amount) (the “2027 Euronotes”)	694.7		714.1
1.125% senior unsecured bonds due 2028 (CHF 210.0 million aggregate principal amount) (the “2028 CHF Bonds”)	216.8		220.3
0.65% senior unsecured notes due 2032 (¥53.2 billion aggregate principal amount) (the “2032 Yen Notes”)	478.6		470.2
4.375% senior unsecured notes due 2045	499.3		499.3
Other	188.6		208.6
Total debt	11,320.7		10,522.1
Less: currently payable	175.1		194.7
Long-term debt	$	11,145.6	$	10,327.4

For additional details regarding the Company’s debt financing, reference is made to Note 9 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report.

The Company satisfies any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs. Credit support for the commercial paper programs is generally provided by the Company’s $4.0 billion unsecured, multi-year revolving credit facility with a syndicate of banks that expires on July 10, 2020 (the “Credit Facility”), which can also be used for working capital and other general corporate purposes, and the 364-Day Facility described below. As of June 29, 2018, no borrowings were outstanding under the Credit Facility or the 364-Day Facility, and the Company was in compliance with all covenants thereunder. In addition to the Credit Facility and the 364-Day Facility, the Company has also entered into reimbursement agreements with various commercial banks to support the issuance of letters of credit.

As of June 29, 2018, borrowings outstanding under the Company’s euro-denominated commercial paper program had a weighted average annual interest rate of negative 0.3% and a weighted average remaining maturity of approximately 41 daysand no borrowings were outstanding under the Company’s U.S. dollar denominated paper program.

17

The Company has classified the $500 million of 2018 U.S. Notes and approximately $3.4 billion of its borrowings outstanding under the commercial paper programs as of June 29, 2018 as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Credit Facility, to refinance these borrowings for at least one year from the balance sheet date.

Debt discounts, premiums and debt issuance costs totaled $22 million and $25 million as of June 29, 2018 and December 31, 2017, respectively, and have been netted against the aggregate principal amounts of the related debt in the components of debt table above.

364-Day Revolving Credit Facility

On March 23, 2018, the Company entered into a new $1.0 billion 364-day revolving credit facility (the “364-Day Facility”) to provide liquidity support for the issuance of additional commercial paper to fund a portion of the IDT acquisition (refer to Note 3 for information about the acquisition). The 364-Day Facility expires on March 22, 2019 (the “Scheduled Termination Date”). The Company may elect, upon the payment of a fee equal to 0.75% of the principal amount of the loans then outstanding and, upon the satisfaction of certain conditions, to convert any loans outstanding on the Scheduled Termination Date into term loans that are due and payable one year following the Scheduled Termination Date.

Borrowings under the 364-Day Facility bear interest as follows: (1) Eurodollar Rate Loans bear interest at a variable rate per annum equal to the London inter-bank offered rate plus 81.5 basis points; and (2) Base Rate Loans bear interest at a variable rate per annum equal to the highest of (a) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 0.5%, (b) the rate of interest in effect for such day as publicly announced by Bank of America, N.A. as its “prime rate,” and (c) the Eurodollar Rate plus 1.0%. In addition, the Company is required to pay a per annum facility fee of six basis points based on the aggregate commitments under the 364-Day Facility, regardless of usage.

The 364-Day Facility requires the Company to maintain a consolidated leverage ratio (as defined in the facility) of 0.65 to 1.00 or less. Borrowings under the 364-Day Facility are prepayable at the Company’s option at any time in whole or in part without premium or penalty.

The Company’s obligations under the 364-Day Facility are unsecured. The Company has unconditionally and irrevocably guaranteed the obligations of each of its subsidiaries in the event a subsidiary is named a borrower under the 364-Day Facility. The 364-Day Facility contains customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants.

Guarantors of Debt

The Company has guaranteed long-term debt and commercial paper issued by certain of its wholly-owned subsidiaries. The 2019, 2022, Floating Rate 2022, 2025 and 2027 Euronotes were issued by DH Europe Finance S.A. (“Danaher International”). The 2023 and 2028 CHF Bonds were issued by DH Switzerland Finance S.A. (“Danaher Switzerland”). The 2021, 2027 and 2032 Yen Notes were issued by DH Japan Finance S.A. (“Danaher Japan”). Each of Danaher International, Danaher Switzerland and Danaher Japan are wholly-owned finance subsidiaries of Danaher Corporation. All of the securities issued by each of these entities, as well as the 2020 Assumed Pall Notes, are fully and unconditionally guaranteed by the Company and these guarantees rank on parity with the Company’s unsecured and unsubordinated indebtedness.

LYONs Redemption

During the six-month period ended June 29, 2018, holders of certain of the Company’s LYONs converted such LYONs into an aggregate of approximately 487 thousand shares of the Company’s common stock, par value $0.01 per share. The Company’s deferred tax liability associated with the book and tax basis difference in the converted LYONs of $4 million was transferred to additional paid-in capital as a result of the conversions.

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NOTE 8. DEFINED BENEFIT PLANS

The following sets forth the components of the Company’s net periodic benefit cost of the noncontributory defined benefit pension plans ($ in millions):

	Three-Month Period Ended						Six-Month Period Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
U.S. Pension Benefits:
Service cost	$	(2.1	)	$	(1.9	)	$	(4.2	)	$	(3.8	)
Interest cost	(20.2		)	(21.0		)	(40.4		)	(42.0		)
Expected return on plan assets	33.1			32.9			66.2			65.8
Amortization of actuarial loss	(7.8		)	(6.6		)	(15.6		)	(13.2		)
Amortization of prior service cost	(0.2		)	—			(0.5		)	—
Net periodic pension benefit	$	2.8		$	3.4		$	5.5		$	6.8
Non-U.S. Pension Benefits:
Service cost	$	(8.9	)	$	(7.9	)	$	(17.6	)	$	(15.6	)
Interest cost	(6.6		)	(6.5		)	(13.3		)	(12.8		)
Expected return on plan assets	11.9			10.5			24.0			20.7
Amortization of actuarial loss	(1.5		)	(1.9		)	(3.0		)	(3.8		)
Amortization of prior service credit	0.1			0.1			0.2			0.2
Settlement loss recognized	—			—			(0.4		)	—
Net periodic pension cost	$	(5.0	)	$	(5.7	)	$	(10.1	)	$	(11.3	)

The following sets forth the components of the Company’s net periodic benefit cost of the other postretirement employee benefit plans ($ in millions):

	Three-Month Period Ended						Six-Month Period Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Service cost	$	(0.2	)	$	(0.2	)	$	(0.3	)	$	(0.4	)
Interest cost	(1.1		)	(1.3		)	(2.3		)	(2.6		)
Amortization of prior service credit	0.6			0.8			1.2			1.6
Net periodic benefit cost	$	(0.7	)	$	(0.7	)	$	(1.4	)	$	(1.4	)

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In the first quarter of 2018, the Company adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, which requires the Company to disaggregate the service cost component from other components of net periodic benefit costs and report the service cost component in the same line item as other compensation costs and the other components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses) separately and outside a subtotal of operating income. As this ASU requires application on a retrospective basis, the Company restated the prior period presentation for the adoption of this ASU, resulting in a decrease in operating profit and an increase in other income, net of $7.0 million and $13.9 million for the three and six-month periods ended June 30, 2017. The net periodic benefit cost of the noncontributory defined benefit pension plans and other postretirement employee benefit plans incurred during the three and six-month periods ended June 29, 2018 and June 30, 2017 are reflected in the following captions in the accompanying Consolidated Condensed Statements of Earnings ($ in millions):

	Three-Month Period Ended						Six-Month Period Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Service cost:
Cost of sales	$	(3.3	)	$	(2.1	)	$	(5.4	)	$	(4.1	)
Selling, general and administrative expenses	(7.9		)	(7.9		)	(16.7		)	(15.7		)
Total service cost	(11.2		)	(10.0		)	(22.1		)	(19.8		)
Other net periodic benefit costs:
Other income, net	8.3			7.0			16.1			13.9
Total	$	(2.9	)	$	(3.0	)	$	(6.0	)	$	(5.9	)

Employer Contributions

During 2018, the Company’s cash contribution requirements for its U.S. and non-U.S. defined benefit pension plans are forecasted to be approximately $30 million and $55 million, respectively. The ultimate amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

NOTE 9. INCOME TAXES

The following table summarizes the Company’s effective tax rate from continuing operations:

	Three-Month Period Ended				Six-Month Period Ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Effective tax rate from continuing operations	19.3	%	13.6	%	19.9	%	15.4	%

The Company’s effective tax rate for 2018 was slightly lower than the U.S. federal statutory rate of 21.0%due principally to the impact of the Company’s earnings outside the United States which overall are taxed at rates lower than the U.S. federal rate. The effective tax rate for the three-month period ended June 29, 2018 includes the benefit of a lower U.S. corporate income tax rate of 21.0% from the enactment of the TCJA, partially offset by a new minimum tax on certain non-U.S. earnings. The effective tax rate for the three and six-month periods ended June 29, 2018 also includes net tax benefits of $9 million ($0.01 per diluted share) for release of reserves upon the expiration of statutes of limitation and excess tax benefits from stock-based compensation which were partially offset by increases in estimates associated with prior period uncertain tax provisions and other matters.

The Company’s effective tax rate for 2017 differed from the then-effective U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States which generally are taxed at rates lower than such U.S. federal rate.The effective tax rate for the three-month period endedJune 30, 2017 included a benefit from the release of reserves upon the expiration of statutes of limitations and audit settlements, as well as higher tax benefits from restructuring charges that are predominantly in the United States, which in aggregate decreased the reported tax rate by 6.9%. The effective tax rate for thesix-month period endedJune 30, 2017reflects the aforementioned benefits recorded in the second quarter of 2017and higher than expected benefits recorded in the first quarter of2017related to excess tax benefits from stock-based compensation, which in aggregate reduced the reported tax rate by5.1%.

On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA:

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• establishes a flat corporate income tax rate of 21.0% on U.S. earnings;

• imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);

• imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation (Global Intangible Low-Taxed Income or “GILTI Tax”);

• subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);

• eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;

• allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and

• reduces deductions with respect to certain compensation paid to specified executive officers.

As U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date, the Company recognized an estimate of the impact of the TCJA in the year ended December 31, 2017. As a result of the TCJA, the Company recognized a provisional tax liability of approximately $1.2 billion in 2017 for the Transition Tax, which is payable over a period of eight years. The Company also remeasured U.S. deferred tax assets and liabilities based on the income tax rates at which the deferred tax assets and liabilities are expected to reverse in the future (generally 21.0%), resulting in an income tax benefit of approximately $1.2 billion in 2017. For a description of the impact of the TCJA for the year ended December 31, 2017 reference is made to Note 12 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report.

Due to the complexities involved in accounting for the enactment of the TCJA, SAB No. 118 allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB No. 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. During the three and six-month periods ended June 29, 2018, there were no changes made to the provisional amounts recognized in 2017. The Company continues to analyze the effects of the TCJA on its Consolidated Condensed Financial Statements. Additional impacts from the enactment of the TCJA will be recorded as they are identified during the measurement period as provided for in SAB No. 118, which extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other things, changes in the Company’s interpretation of the TCJA, legislative or administrative actions to clarify the intent of the statutory language provided that differ from the Company’s current interpretation, any changes in accounting standards for income taxes or related interpretations in response to the TCJA, or any updates or changes to estimates utilized to calculate the impacts, including changes to current year earnings estimates and applicable foreign exchange rates. Additionally, the Company’s U.S. tax returns for 2017 will be filed during the fourth quarter of 2018 and any changes to the tax positions for temporary differences compared to the estimates used will result in an adjustment of the estimated tax benefit recorded as of December 31, 2017. 

The Company also continues to evaluate the impact of the GILTI provisions under the TCJA which are complex and subject to continuing regulatory interpretation by the U.S. Internal Revenue Service (“IRS”). The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy election with respect to the new GILTI Tax rules will depend, in part, on analyzing its global income to determine whether it can reasonably estimate the tax impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for 2018, it has not completed its analysis and has not determined which method to elect. Adjustments related to the amount of GILTI Tax recorded in its Consolidated Condensed Financial Statements may be required based on the outcome of this election.

Tax authorities in Denmark have raised significant issues related to interest accrued by certain of the Company’s subsidiaries. On December 10, 2013, the Company received assessments from the Danish tax authority (“SKAT”) totaling approximatelyDKK 1.6 billion including interest through June 29, 2018 (approximately $245 million based on the exchange rate as ofJune 29, 2018), imposing withholding tax relating to interest accrued in Denmark on borrowings from certain of the Company’s subsidiaries for the years 2004-2009. The Company is currently in discussions with SKAT and anticipates receiving an

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assessment for years 2010-2012 totaling approximately DKK 924 million including interest through June 29, 2018 (approximately $145 million based on the exchange rate as of June 29, 2018). Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is vigorously defending its positions. The Company appealed these assessments to the National Tax Tribunal in 2014 and intends on pursuing this matter through the European Court of Justice should this appeal be unsuccessful. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s consolidated financial statements, including its effective tax rate.

NOTE 10. NONOPERATING INCOME (EXPENSE)

As described in Note 1 and Note 8, in the first quarter of 2018, the Company adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU requires the Company to disaggregate the service cost component from the other components of net periodic benefit costs and requires the Company to present the other components of net periodic benefit cost in other income, net. The ASU also requires application on a retrospective basis. The other components of net periodic benefit costs included in other income, net for the three and six-month periods ended June 29, 2018 were $8.3 million and $16.1 million, respectively, compared to $7.0 million and $13.9 million for the three and six-month periods ended June 30, 2017, respectively.

NOTE 11. COMMITMENTS AND CONTINGENCIES

For a description of the Company’s litigation and contingencies, reference is made to Note 16 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report.

The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly, and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.

The following is a rollforward of the Company’s accrued warranty liability ($ in millions):

Balance, December 31, 2017	$	79.0
Accruals for warranties issued during the period	30.2
Settlements made	(30.5		)
Effect of foreign currency translation	(1.2		)
Balance, June 29, 2018	$	77.5

NOTE 12. STOCK TRANSACTIONS AND STOCK-BASED COMPENSATION

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the six-month period ended June 29, 2018. On July 16, 2013, the Company’s Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. As of June 29, 2018, 20 million shares remained available for repurchase pursuant to the Repurchase Program.

For a full description of the Company’s stock-based compensation programs, reference is made to Note 17 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report. As of June 29, 2018, approximately 60 million shares of the Company’s common stock were reserved for issuance under the 2007 Omnibus Incentive Plan.

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The following summarizes the components of the Company’s stock-based compensation expense ($ in millions):

	Three-Month Period Ended						Six-Month Period Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Restricted stock units (“RSUs”)/performance stock units (“PSUs”):
Pretax compensation expense	$	24.7		$	24.1		$	45.6		$	45.7
Income tax benefit	(5.2		)	(7.4		)	(9.6		)	(14.1		)
RSU/PSU expense, net of income taxes	19.5			16.7			36.0			31.6
Stock options:
Pretax compensation expense	15.4			13.7			27.8			25.7
Income tax benefit	(3.3		)	(4.4		)	(5.9		)	(8.2		)
Stock option expense, net of income taxes	12.1			9.3			21.9			17.5
Total stock-based compensation:
Pretax compensation expense	40.1			37.8			73.4			71.4
Income tax benefit	(8.5		)	(11.8		)	(15.5		)	(22.3		)
Total stock-based compensation expense, net of income taxes	$	31.6		$	26.0		$	57.9		$	49.1

Stock-based compensation has been recognized as a component of selling, general and administrative expenses in the accompanying Consolidated Condensed Statements of Earnings. As of June 29, 2018, $190 million of total unrecognized compensation cost related to RSUs/PSUs is expected to be recognized over a weighted average period of approximately three years. As of June 29, 2018, $163 million of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted average period of approximately three years. Future compensation amounts will be adjusted for any changes in estimated forfeitures.

NOTE 13. NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS

Basic net earnings per share (“EPS”) from continuing operations is calculated by dividing net earnings from continuing operations by the weighted average number of common shares outstanding for the applicable period. Diluted net EPS from continuing operations is computed based on the weighted average number of common shares outstanding increased by the number of additional shares that would have been outstanding had the potentially dilutive common shares been issued and reduced by the number of shares the Company could have repurchased with the proceeds from the issuance of the potentially dilutive shares. For the three-month period ended June 29, 2018, no options to purchase shares were excluded from the diluted EPS from continuing operations calculation. For the six-month period ended June 29, 2018, two million options to purchase shares were not included in the diluted EPS from continuing operations calculation as the impact of their inclusion would have been anti-dilutive. For both the three and six-month periods ended June 30, 2017, approximately four million options to purchase shares were not included in the diluted EPS from continuing operations calculation as the impact of their inclusion would have been anti-dilutive.

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Information related to the calculation of net earnings per share from continuing operations is summarized as follows ($ and shares in millions, except per share amounts):

	Net Earnings from Continuing Operations (Numerator)		Shares (Denominator)	Per Share Amount
For the Three-Month Period Ended June 29, 2018:
Basic EPS	$	673.8	700.2	$	0.96
Adjustment for interest on convertible debentures	0.5		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		6.9
Incremental shares from assumed conversion of the convertible debentures	—		2.4
Diluted EPS from continuing operations	$	674.3	709.5	$	0.95
For the Three-Month Period Ended June 30, 2017:
Basic EPS	$	557.3	695.4	$	0.80
Adjustment for interest on convertible debentures	0.5		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		7.1
Incremental shares from assumed conversion of the convertible debentures	—		2.9
Diluted EPS from continuing operations	$	557.8	705.4	$	0.79
For the Six-Month Period Ended June 29, 2018:
Basic EPS	$	1,240.4	699.4	$	1.77
Adjustment for interest on convertible debentures	1.1		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		7.6
Incremental shares from assumed conversion of the convertible debentures	—		2.5
Diluted EPS from continuing operations	$	1,241.5	709.5	$	1.75
For the Six-Month Period Ended June 30, 2017:
Basic EPS	$	1,041.1	694.9	$	1.50
Adjustment for interest on convertible debentures	1.0		—
Incremental shares from assumed exercise of dilutive options and vesting of dilutive RSUs and PSUs	—		7.7
Incremental shares from assumed conversion of the convertible debentures	—		2.9
Diluted EPS from continuing operations	$	1,042.1	705.5	$	1.48

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NOTE 14. SEGMENT INFORMATION

The Company operates and reports its results in four separate business segments consisting of the Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions segments. When determining the reportable segments, the Company aggregated operating segments based on their similar economic and operating characteristics. Operating profit represents total revenues less operating expenses, excluding nonoperating income and expense, interest and income taxes. Intersegment amounts are not significant and are eliminated to arrive at consolidated totals. Operating profit amounts in the Other segment consist of unallocated corporate costs and other costs not considered part of management’s evaluation of reportable segment operating performance. There has been no material change in total assets or liabilities by segment since December 31, 2017, with the exception of the inclusion of IDT in the Life Sciences segment in April 2018 (refer to Note 3 for additional information).

Segment results are shown below ($ in millions):

	Three-Month Period Ended						Six-Month Period Ended
	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales:
Life Sciences	$	1,605.2		$	1,384.3		$	3,081.2		$	2,692.4
Diagnostics	1,550.9			1,440.0			3,070.6			2,767.3
Dental	733.4			702.6			1,406.0			1,358.1
Environmental & Applied Solutions	1,091.5			983.2			2,118.6			1,898.0
Total	$	4,981.0		$	4,510.1		$	9,676.4		$	8,715.8
Operating profit:
Life Sciences	$	291.5		$	221.6		$	562.8		$	433.2
Diagnostics	274.3			157.6			522.3			312.2
Dental	104.8			109.8			155.7			199.2
Environmental & Applied Solutions	251.0			235.2			478.2			443.2
Other	(54.1		)	(47.5		)	(108.5		)	(94.1		)
Total	$	867.5		$	676.7		$	1,610.5		$	1,293.7

NOTE 15. SUBSEQUENT EVENT

In July 2018, the Company announced its intention to spin-off the Dental business into an independent, publicly traded company (the “Dental Separation”). The Dental business had sales for the year-ended December 31, 2017 of $2.8 billion. The transaction is expected to be tax-free to the Company’s shareholders. The Company is targeting to complete the Dental Separation by the second half of 2019, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, satisfactory completion of financing, receipt of tax opinions, receipt of favorable rulings from the IRS and receipt of other regulatory approvals.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Danaher Corporation’s (“Danaher,” the “Company,” “we,” “us” or “our”) financial statements with a narrative from the perspective of Company management. The Company’s MD&A is divided into five sections:

• Information Relating to Forward-Looking Statements

• Overview

• Results of Operations

• Liquidity and Capital Resources

• Critical Accounting Estimates

You should read this discussion along with the Company’s MD&A and audited financial statements as of and for the year ended December 31, 2017 and Notes thereto, included in the Company’s 2017 Annual Report on Form 10-K filed on February 21, 2018 and the Company’s Consolidated Condensed Financial Statements and related Notes as of and for the three and six-month periods ended June 29, 2018 included in this Report.

Unless otherwise indicated, all financial results in this report refer to continuing operations.

INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS

Certain statements included or incorporated by reference in this quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission, in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; future regulatory approvals; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Danaher intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words.

Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors. Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Important factors that could cause actual results to differ materially from those envisaged in the forward-looking statements include the following:

• We intend to spin-off our Dental business into an independent, publicly traded company by the second half of 2019. The proposed transaction may not be completed on the currently contemplated timeline or at all and may not achieve the intended benefits.

• Conditions in the global economy, the markets we serve and the financial markets may adversely affect our business and financial statements.

• Significant developments or uncertainties stemming from the current U.S. administration, including changes in U.S. trade policies, tariffs and the reaction of other countries thereto, could have an adverse effect on our business.

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• Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.

• We face intense competition and if we are unable to compete effectively, we may experience decreased demand and decreased market share. Even if we compete effectively, we may be required to reduce prices for our products and services.

• Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.

• Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.

• Certain of our businesses are subject to extensive regulation by the U.S. Food and Drug Administration and by comparable agencies of other countries, as well as laws regulating fraud and abuse in the health care industry and the privacy and security of health information. Failure to comply with those regulations could adversely affect our reputation and financial statements.

• The health care industry and related industries that we serve have undergone, and are in the process of undergoing, significant changes in an effort to reduce costs, which could adversely affect our financial statements.

• Any inability to consummate acquisitions at our historical rate and at appropriate prices could negatively impact our growth rate and stock price.

• Our acquisition of businesses, investments, joint ventures and strategic relationships could negatively impact our financial statements.

• The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.

• Divestitures and other dispositions could negatively impact our business, and contingent liabilities from businesses that we have disposed could adversely affect our financial statements.

• We could incur significant liability if any of the 2016 spin-off of Fortive, the 2015 split-off of our communications business or the anticipated spin-off of our Dental business is determined to be a taxable transaction.

• Potential indemnification liabilities pursuant to any of the 2016 spin-off of Fortive, the 2015 split-off of our communications business or the anticipated spin-off of our Dental business could materially and adversely affect our business and financial statements.

• A significant disruption in, or breach in security of, our information technology systems or violation of data privacy laws could adversely affect our business, reputation and financial statements.

• Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our reputation and financial statements.

• Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation.

• Our restructuring actions could have long-term adverse effects on our business.

• We may be required to recognize impairment charges for our goodwill and other intangible assets.

• Foreign currency exchange rates may adversely affect our financial statements.

• Changes in our tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional tax payments for prior periods.

• Changes in tax law relating to multinational corporations could adversely affect our tax position.

• We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements.

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• If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.

• Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.

• The U.S. government has certain rights to use and disclose some of the intellectual property that we license and could exclusively license it to a third party if we fail to achieve practical application of the intellectual property.

• Defects and unanticipated use or inadequate disclosure with respect to our products or services (including software), or allegations thereof, could adversely affect our business, reputation and financial statements.

• The manufacture of many of our products is a highly exacting and complex process, and if we directly or indirectly encounter problems manufacturing products, our reputation, business and financial statements could suffer.

• Our indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial statements.

• Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.

• Certain of our businesses rely on relationships with collaborative partners and other third parties for development, supply and marketing of certain products and potential products, and such collaborative partners or other third parties could fail to perform sufficiently.

• Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.

• If we cannot adjust our manufacturing capacity or the purchases required for our manufacturing activities to reflect changes in market conditions and customer demand, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services could cause production interruptions, delays and inefficiencies.

• Changes in laws or governmental regulations may reduce demand for our products or services or increase our expenses.

• Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations.

• International economic, political, legal, compliance and business factors could negatively affect our financial statements.

• The United Kingdom’s referendum favoring departure from the EU could have an adverse effect on our business.

• If we suffer loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.

• Our defined benefit pension plans are subject to financial market risks that could adversely affect our financial statements.

See Part I—Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 for a further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made. Except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.

OVERVIEW

General

As a result of the Company’s geographic and industry diversity, the Company faces a variety of opportunities and challenges, including rapid technological development (particularly with respect to computing, automation, artificial intelligence, mobile connectivity, communications and digitization) in most of the Company’s served markets, the expansion and evolution of opportunities in high-growth markets, trends and costs associated with a global labor force, consolidation of the Company’s competitors and increasing regulation.  The Company operates in a highly competitive business environment in most markets, and the Company’s long-term growth and profitability will depend in particular on its ability to expand its business in high-

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growth geographies and high-growth market segments, identify, consummate and integrate appropriate acquisitions, develop innovative and differentiated new products and services with higher gross profit margins, expand and improve the effectiveness of the Company’s sales force, continue to reduce costs and improve operating efficiency and quality, and effectively address the demands of an increasingly regulated environment.  The Company is making significant investments, organically and through acquisitions, to address the rapid pace of technological change in its served markets and to globalize its manufacturing, research and development and customer-facing resources (particularly in high-growth markets) in order to be responsive to the Company’s customers throughout the world and improve the efficiency of the Company’s operations.

Business Performance and Outlook

During the second quarter of 2018, the Company’s revenues increased 10.5% compared to the comparable period of 2017. While differences exist among the Company’s businesses, on an overall basis, demand for the Company’s products and services increased during the second quarter of 2018 compared to the comparable period of 2017. This demand, together with the Company’s continued investments in sales growth initiatives and the other business-specific factors discussed below, contributed to year-over-year core sales growth of 6.0% (for the definition of “core sales” or “core revenue” refer to “—Results of Operations” below). Geographically, both high-growth and developed markets contributed to core sales growth during the second quarter of 2018. Core revenues in high-growth markets increased at a high-single digit rate during the second quarter of 2018 as compared to the comparable period of 2017 led primarily by continued strength in China. High-growth markets represented approximately 31% of the Company’s total sales in the second quarter of 2018. Core revenues in developed markets increased at a mid-single digit rate during the second quarter of 2018 led primarily by growth in North America and Western Europe. The Company expects overall year-over-year sales growth to continue for the remainder of 2018 but remains cautious about challenges due to macro-economic and geopolitical uncertainties, including global uncertainties related to trade, tariffs, monetary and fiscal policies. For additional information regarding the Company’s sales by geographical region during the three and six-month periods ended June 29, 2018, please refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

The Company’s income from continuing operations for the three and six-month periods ended June 29, 2018 totaled $674 million or $0.95 per diluted share and approximately $1.2 billion or $1.75 per diluted share, respectively, compared to $557 million or $0.79 per diluted share and approximately $1.0 billion or $1.48 per diluted share, respectively, for the three and six-month periods ended June 30, 2017. The factors discussed below in “Results of Operations” are the primary drivers of the increase in diluted earnings per share for the three and six-month periods ended June 29, 2018.

The Company recorded a net increase to beginning retained earnings of $3 million as of January 1, 2018 due to the cumulative impact of adopting ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain a contract, primarily sales-related commissions, partially offset by the deferral of revenue for unfulfilled performance obligations. The adoption of this ASU did not have a significant impact on the Company’s Consolidated Condensed Financial Statements as of and for the three and six-month periods ended June 29, 2018and, as a result, comparisons of revenues and operating profit performance between periods are not affected by the adoption of this ASU. Refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

Acquisitions & Proposed Separation

Our growth strategy contemplates future acquisitions. Our operations and results can be affected by the rate and extent to which appropriate acquisition opportunities are available, acquired businesses are effectively integrated, and anticipated synergies or cost savings are achieved.

On April 13, 2018, the Company acquired IDT, a privately-held manufacturer of custom DNA and RNA oligonucleotides serving customers in the academic and biopharmaceutical research, biotechnology, agriculture, clinical diagnostics and pharmaceutical development end-markets, for a purchase price of approximately$2.1 billion, net of cash acquired.IDT had revenues of approximately$260 million in 2017. The Company financed the acquisition of IDT with available cash and proceeds from the issuance of commercial paper. The Company preliminarily recorded approximately $1.1 billion of goodwill related to the IDT acquisition. The acquisition of IDT provides additional sales and earnings growth opportunities for the Company’s Life Sciences segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses.

For a description of Danaher’s plan to distribute ownership of its Dental business to Danaher shareholders in a tax-free spin-off transaction, please see “Results of Operations—Dental.”

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Currency Exchange Rates

On a year-over-year basis, currency exchange rates positively impacted reported sales by approximately 2.5% and 4.0% for the three and six-month periods ended June 29, 2018, respectively, compared to the comparable periods of 2017, primarily due to the weakness of the U.S. dollar against several major currencies in the first half of 2018. The recent strengthening of the U.S. dollar has mitigated this impact and if the currency exchange rates in effect as of June 29, 2018 were to prevail throughout the remainder of 2018, currency exchange rates would reduce the Company’s estimated sales for the second half of 2018 by approximately 1.0% on a year-over-year basis. Any future strengthening of the U.S. dollar against major currencies would adversely impact the Company’s sales and results of operations for the remainder of the year, and any weakening of the U.S. dollar against major currencies would positively impact the Company’s sales and results of operations for the remainder of the year.

RESULTS OF OPERATIONS

Non-GAAP Measures

In this report, references to the non-GAAP measure of core sales (also referred to as core revenues or sales/revenues from existing businesses) refer to sales from continuing operations calculated according to U.S. GAAP, but excluding:

• sales from acquired businesses; and

• the impact of currency translation.

References to sales or operating profit attributable to acquisitions or acquired businesses refer to sales or operating profit, as applicable, from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales and operating profit, as applicable, attributable to divested product lines not considered discontinued operations. The portion of revenue attributable to currency translation is calculated as the difference between:

• the period-to-period change in revenue (excluding sales from acquired businesses); and

• the period-to-period change in revenue (excluding sales from acquired businesses) after applying current period foreign exchange rates to the prior year period.

Core sales growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting the non-GAAP financial measure of core sales growth provides useful information to investors by helping identify underlying growth trends in Danaher’s business and facilitating comparisons of Danaher’s revenue performance with its performance in prior and future periods and to Danaher’s peers. Management also uses core sales growth to measure the Company’s operating and financial performance. The Company excludes the effect of currency translation from core sales because currency translation is not under management’s control, is subject to volatility and can obscure underlying business trends. The Company excludes the effect of acquisitions and divestiture-related items because the nature, size, timing and number of acquisitions and divestitures can vary dramatically from period-to-period and between the Company and its peers and can also obscure underlying business trends and make comparisons of long-term performance difficult.

Throughout this discussion, references to sales volume refer to the impact of both price and unit sales and references to productivity improvements generally refer to improved cost-efficiencies resulting from the ongoing application of the Danaher Business System.

Revenue Performance

	% Change Three-Month Period Ended June 29, 2018 vs. Comparable 2017 Period		% Change Six- Month Period Ended June 29, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	10.5	%	11.0	%
Less the impact of:
Acquisitions	(2.0	)%	(1.5	)%
Currency exchange rates	(2.5	)%	(4.0	)%
Core revenue growth (non-GAAP)	6.0	%	5.5	%

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Operating Profit Performance

Operating profit margins increased240 basis points during the three-month period ended June 29, 2018 as compared to the comparable period of 2017.

Second quarter2018 vs. second quarter2017operating profit margin comparisons were favorably impacted by:

• Higher 2018 core sales volumes, incremental year-over-year cost savings associated with continuing productivity improvement initiatives taken in 2018 and 2017 and the impact of the weaker U.S. dollar in the second quarter of 2018, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 105 basis points

• Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 170 basis points

• Second quarter 2018 gain on resolution of acquisition-related matters - 20 basis points

Second quarter2018 vs. second quarter2017operating profit margin comparisons were unfavorably impacted by:

• The incremental net dilutive effect in 2018 of acquired businesses - 20 basis points

• Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in 2018 in connection with the IDT acquisition - 35 basis points

Operating profit margins increased180 basis points during the six-month period ended June 29, 2018 as compared to the comparable period of 2017.

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:

• Higher 2018 sales volumes from existing businesses and incremental year-over-year cost savings associated with the ongoing restructuring actions and continuing productivity improvement initiatives taken in 2018 and 2017 and the impact of the weaker U.S. dollar in 2018, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 120 basis points

• Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 85 basis points

• Second quarter 2018 gain on resolution of acquisition-related matters - 10 basis points

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were unfavorably impacted by:

• The incremental net dilutive effect in 2017 of acquired businesses - 20 basis points

• Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in 2018 in connection with the IDT acquisition - 15 basis points

Business Segments

Sales by business segment for each of the periods indicated were as follows ($ in millions):

	Three-Month Period Ended				Six-Month Period Ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Life Sciences	$	1,605.2	$	1,384.3	$	3,081.2	$	2,692.4
Diagnostics	1,550.9		1,440.0		3,070.6		2,767.3
Dental	733.4		702.6		1,406.0		1,358.1
Environmental & Applied Solutions	1,091.5		983.2		2,118.6		1,898.0
Total	$	4,981.0	$	4,510.1	$	9,676.4	$	8,715.8

For information regarding the Company’s sales by geographical region during the three and six-month periods ended June 29, 2018, please refer to Note 2 to the accompanying Consolidated Condensed Financial Statements.

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LIFE SCIENCES

The Company’s Life Sciences segment offers a broad range of research tools that scientists use to study the basic building blocks of life, including genes, proteins, metabolites and cells, in order to understand the causes of disease, identify new therapies and test new drugs and vaccines.  The segment, through its Pall Corporation business, is also a leading provider of filtration, separation and purification technologies to the biopharmaceutical, food and beverage, medical, aerospace, microelectronics and general industrial segments.

Life Sciences Selected Financial Data

	Three-Month Period Ended						Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	1,605.2		$	1,384.3		$	3,081.2		$	2,692.4
Operating profit	291.5			221.6			562.8			433.2
Depreciation	31.6			29.0			62.2			59.1
Amortization	90.5			76.4			171.2			153.0
Operating profit as a % of sales	18.2		%	16.0		%	18.3		%	16.1		%
Depreciation as a % of sales	2.0		%	2.1		%	2.0		%	2.2		%
Amortization as a % of sales	5.6		%	5.5		%	5.6		%	5.7		%

Revenue Performance

	% Change Three-Month Period Ended June 29, 2018 vs. Comparable 2017 Period		% Change Six- Month Period Ended June 29, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	16.0	%	14.5	%
Less the impact of:
Acquisitions	(6.0	)%	(3.5	)%
Currency exchange rates	(2.5	)%	(4.5	)%
Core revenue growth (non-GAAP)	7.5	%	6.5	%

Price increases in the segment contributed 1.0% and 0.5% to sales growth on a year-over-year basis during the three and six-month periods ended June 29, 2018, respectively, and are reflected as a component of core revenue growth.

Core sales of the business’ broad range of mass spectrometers grew on a year-over-year basis during both the three and six-month periods ended June 29, 2018, led by strong sales growth in high-growth markets, primarily China, and North America. Core sales of microscopy products grew during both the three and six-month periods ended June 29, 2018 across most major end-markets, due partially to demand related to the release of new products. Geographically, demand for microscopy products increased primarily in the developed markets, led by North America. Demand for the business’ flow cytometry and particle counting product lines was strong across most major geographies with particular strength in North America, China and Western Europe in both the three and six-month periods ended June 29, 2018 as compared to the comparable periods in 2017. Recent product launches also contributed to the increased demand. Core sales for filtration, separation and purification technologies increased in both the three and six-month periods ended June 29, 2018 compared to the comparable periods in 2017, led by continued growth in the biopharmaceuticals and microelectronics end-markets across most major geographies.

Sales growth from acquisitions is primarily due to the acquisition of IDT in April 2018. IDT provides additional sales and earnings growth opportunities for the segment by expanding the segment’s product line diversity, including new product and service offerings in the area of genomics consumables, and through the potential future acquisition of complementary businesses. During the three-month period ended June 29, 2018, IDT’s revenues grew on a year-over-year basis with growth across all major geographies and product lines.

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Operating Profit Performance

Operating profit margins increased220 basis points during the three-month period ended June 29, 2018 as compared to the comparable period of 2017.

Second quarter2018 vs. second quarter2017 operating profit margin comparisons were favorably impacted by:

• Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017 and the impact of the weaker U.S. dollar in the second quarter of 2018, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments in 2018 - 290 basis points

• Second quarter 2018 gain on resolution of acquisition-related matters - 55 basis points

Second quarter2018 vs. second quarter2017 operating profit margin comparisons were unfavorably impacted by:

• The incremental net dilutive effect in 2018 of acquired businesses - 25 basis points

• Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in 2018 in connection with the IDT acquisition - 100 basis points

Operating profit margins increased220 basis points during the six-month period ended June 29, 2018 as compared to the comparable period of 2017.

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were favorably impacted by:

• Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017 and the impact of the weaker U.S. dollar in the second quarter of 2018, net of incremental year-over-year costs associated with various new product development, sales and marketing growth investments in 2018 - 270 basis points

• Second quarter 2018 gain on resolution of acquisition-related matters - 30 basis points

Year-to-date 2018 vs. year-to-date 2017 operating profit margin comparisons were unfavorably impacted by:

• The incremental net dilutive effect in 2018 of acquired businesses - 30 basis points

• Acquisition-related charges associated with transaction costs and fair value adjustments to acquired inventory recorded in 2018 in connection with the IDT acquisition - 50 basis points

DIAGNOSTICS

The Company’s Diagnostics segment offers analytical instruments, reagents, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.

Diagnostics Selected Financial Data

	Three-Month Period Ended						Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	1,550.9		$	1,440.0		$	3,070.6		$	2,767.3
Operating profit	274.3			157.6			522.3			312.2
Depreciation	98.0			91.6			192.3			179.2
Amortization	52.6			49.9			105.7			106.0
Operating profit as a % of sales	17.7		%	10.9		%	17.0		%	11.3		%
Depreciation as a % of sales	6.3		%	6.4		%	6.3		%	6.5		%
Amortization as a % of sales	3.4		%	3.5		%	3.4		%	3.8		%

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Revenue Performance

	% Change Three-Month Period Ended June 29, 2018 vs. Comparable 2017 Period		% Change Six- Month Period Ended June 29, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	7.5	%	11.0	%
Less the impact of:
Currency exchange rates	(2.5	)%	(4.0	)%
Core revenue growth (non-GAAP)	5.0	%	7.0	%

Price increases in the segment did not significantly impact sales growth on a year-over-year basis during the three or six-month periods ended June 29, 2018.

During both the three and six-month periods ended June 29, 2018, core sales grew in the molecular diagnostics business driven by test menu expansion and strong growth in developed markets. During the three-month period ended June 29, 2018, the growth was partially offset by lower project sales in high-growth markets. During the first quarter of 2018, the molecular diagnostics business experienced particularly strong growth in the infectious diseases product line driven in part by the severity of the flu season. Core sales in the segment’s clinical lab business increased on a year-over-year basis for both the three and six-month periods ended June 29, 2018 due to increased demand in the high-growth markets, led by China. Increased demand in the immunoassay and chemistry product lines drove the majority of the growth for both the three and six-month periods. Core sales in the acute care diagnostic business increased year-over-year in both the three and six-month periods ended June 29, 2018, due to continued strong sales of blood gas and immunoassay product lines across most major geographies, with particularly strong growth in the high-growth markets. Core sales in the pathology diagnostics business grew year-over-year in both the three and six-month periods ended June 29, 2018, led by demand for new products in both the advanced staining and core histology product lines. Core sales increased for the pathology diagnostics business across most major geographies, led by North America, Western Europe and China in both the three and six-month periods ended June 29, 2018.

Operating Profit Performance

Operating profit margins increased680 basis points during the three-month period ended June 29, 2018 as compared to the comparable period of 2017. The following factors favorably impacted year-over-year operating profit margin comparisons:

• Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017 and the impact of the weaker U.S. dollar in the second quarter of 2018, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 150 basis points

• Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 530 basis points

Operating profit margins increased570 basis points during the six-month period ended June 29, 2018 as compared to the comparable period of 2017. The following factors favorably impacted year-over-year operating profit margin comparisons:

• Higher 2018 core sales volumes, incremental year-over-year cost savings associated with the restructuring actions and continuing productivity improvement initiatives taken in 2017 and the impact of the weaker U.S. dollar in the second quarter of 2018, net of incremental year-over-year costs associated with various new product development, sales, service and marketing growth investments - 295 basis points

• Restructuring, impairment and other related charges related to discontinuing a product line in the second quarter of 2017 - 275 basis points

DENTAL

The Company’s Dental segment provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. The Company is a leading worldwide provider of a broad range of dental consumables, equipment and services, and is dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity.

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Dental Selected Financial Data

	Three-Month Period Ended						Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	733.4		$	702.6		$	1,406.0		$	1,358.1
Operating profit	104.8			109.8			155.7			199.2
Depreciation	9.8			10.2			19.7			20.4
Amortization	22.6			20.2			45.5			40.2
Operating profit as a % of sales	14.3		%	15.6		%	11.1		%	14.7		%
Depreciation as a % of sales	1.3		%	1.5		%	1.4		%	1.5		%
Amortization as a % of sales	3.1		%	2.9		%	3.2		%	3.0		%

Revenue Performance

	% Change Three-Month Period Ended June 29, 2018 vs. Comparable 2017 Period		% Change Six- Month Period Ended June 29, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	4.5	%	3.5	%
Less the impact of:
Currency exchange rates	(2.5	)%	(4.0	)%
Core revenue growth (non-GAAP)	2.0	%	(0.5	)%

Price in the segment negatively impacted sales growth by 0.5% on a year-over-year basis in both the three and six-month periods ended June 29, 2018, and are reflected as a component of core revenue growth.

Geographically, year-over-year core revenue growth was driven by China and other high-growth markets in both the three and six-month periods ended June 29, 2018. In the six-month period, this growth was more than offset by lower demand in North America and Western Europe. Core revenue growth for the specialty consumables business, which consists of implant systems and orthodontic products, was led by high-growth markets and North America for both the three and six-month periods ended June 29, 2018. Core sales of dental equipment and traditional dental consumables were up slightly in the three-month period ended June 29, 2018, as increased demand in the high-growth markets was largely offset by weaker demand in the developed markets. For the six-month period ended June 29, 2018, lower core sales of dental equipment and traditional dental consumables product lines in North America more than offset the year-over-year growth in the specialty consumables categories, primarily reflecting the Company’s efforts to reduce the amount of inventory held by several distribution partners as well as the realignment of distributors and manufacturers in the dental industry.

In July 2018, the Company announced its intention to spin-off the Dental business into an independent, publicly traded company. The Dental business had sales for the year-ended December 31, 2017 of $2.8 billion. The transaction is expected to be tax-free to the Company’s shareholders. The Company is targeting to complete the Dental Separation by the second half of 2019, subject to the satisfaction of certain conditions, including obtaining final approval from the Danaher Board of Directors, satisfactory completion of financing, receipt of tax opinions, receipt of favorable rulings from the IRS and receipt of other regulatory approvals.

Operating Profit Performance

Operating profit margins decreased130 basis points during the three-month period ended June 29, 2018 as compared to the comparable period of 2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

• Incremental year-over-year costs associated with sales and marketing growth investments and increased spending on productivity initiatives in 2018 and lower overall pricing, net of higher core sales volumes, cost savings associated with productivity initiatives taken in 2017 and the impact of the weaker U.S. dollar in 2018 - 125 basis points

• The incremental net dilutive effect in 2018 of acquired businesses - 5 basis points

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Operating profit margins decreased360 basis points during the six-month period ended June 29, 2018 as compared to the comparable period of 2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

• Lower core sales of dental equipment and traditional dental consumables, incremental year-over-year costs associated with sales and marketing growth investments, lower overall pricing and increased spending on productivity initiatives in 2018, net of cost savings associated with productivity initiatives taken in 2017 and the impact of the weaker U.S. dollar in 2018 - 355 basis points

• The incremental net dilutive effect in 2018 of acquired businesses - 5 basis points

ENVIRONMENTAL & APPLIED SOLUTIONS

The Company’s Environmental & Applied Solutions segment products and services help protect important resources and keep global food and water supplies safe. The Company’s water quality business provides instrumentation, services and disinfection systems to help analyze, treat and manage the quality of ultra-pure, potable, industrial waste, ground, source and ocean water in residential, commercial, municipal, industrial and natural resource applications. The Company’s product identification business provides equipment, consumables, software and services for various printing, marking, coding, traceability, packaging, design and color management applications on consumer, pharmaceutical and industrial products.

Environmental & Applied Solutions Selected Financial Data

	Three-Month Period Ended						Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	1,091.5		$	983.2		$	2,118.6		$	1,898.0
Operating profit	251.0			235.2			478.2			443.2
Depreciation	12.1			10.4			23.8			20.3
Amortization	15.4			13.8			31.0			27.2
Operating profit as a % of sales	23.0		%	23.9		%	22.6		%	23.4		%
Depreciation as a % of sales	1.1		%	1.1		%	1.1		%	1.1		%
Amortization as a % of sales	1.4		%	1.4		%	1.5		%	1.4		%

Revenue Performance

	% Change Three-Month Period Ended June 29, 2018 vs. Comparable 2017 Period		% Change Six- Month Period Ended June 29, 2018 vs. Comparable 2017 Period
Total sales growth (GAAP)	11.0	%	11.5	%
Less the impact of:
Acquisitions	(1.5	)%	(2.0	)%
Currency exchange rates	(2.5	)%	(3.5	)%
Core revenue growth (non-GAAP)	7.0	%	6.0	%

Price increases in the segment contributed 2.0% and 1.5% to sales growth on a year-over-year basis during the three and six-month periods ended June 29, 2018, respectively, and are reflected as a component of core revenue growth.

Core sales in the segment’s water quality business grew at high-single digit rates during both the three and six-month periods ended June 29, 2018, as compared to the comparable periods of 2017. Year-over-year core sales in the analytical instrumentation product line increased in both the three and six-month periods, driven by higher demand across most major geographies, led by China, North America and Western Europe. Core revenue growth in the business’ chemical treatment solutions product line for both the three and six-month periods was driven by higher demand in primary metals, paper, mining and commercial and institutional end-markets, partially offset by lower demand in the food and chemical end-markets in the three and six-month periods as well as the oil and gas end-market for the six-month period. Geographically, year-over-year core revenue growth for chemical treatment solutions was driven by increased demand in North America and high-growth markets for both the three and six-month periods. Core sales in the business’ ultraviolet water disinfection product line increased both in the three and six-month periods ended June 29, 2018 as compared to the comparable periods of 2017, led by

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strength in municipal end-markets. Geographically, year-over-year core revenue growth for ultraviolet water disinfection products was driven by higher demand in North America in the three-month period and North America and China in the six-month period, partially offset by softer demand in Western Europe in both periods.

Core sales in the segment’s product identification businesses grew at a mid-single digit rate during both the three and six-month periods ended June 29, 2018 as compared to the comparable periods of 2017. Continued strong year-over-year demand for marking and coding equipment and related consumables in most major geographies, led by Western Europe, North America and high-growth markets, drove the majority of the core revenue growth. Demand for packaging and color solutions products and services decreased slightly for the three-month period June 29, 2018 and was essentially flat for the six-month period ended June 29, 2018 as compared to the comparable periods of 2017. Geographically, year-over-year core revenue growth for packaging and color solutions products and services was driven by developed markets, largely offset by weaker demand in the high-growth markets for the six-month period. For the three-month period, weaker demand in the developed markets more than offset increased demand in the high-growth markets.

Operating Profit Performance

Operating profit margins decreased90 basis points during the three-month period ended June 29, 2018 as compared to the comparable period of 2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

• Higher year-over-year costs associated with various new product development, sales and marketing growth investments and higher raw material costs, net of the impact of higher core sales volumes and the impact of the weaker U.S. dollar in 2018 - 50 basis points

• The incremental net dilutive effect in 2018 of acquired businesses - 40 basis points

Operating profit margins decreased80 basis points during the six-month period ended June 29, 2018 as compared to the comparable period of 2017. The following factors unfavorably impacted year-over-year operating profit margin comparisons:

• Higher year-over-year costs associated with various new product development, sales and marketing growth investments and higher raw material costs, net of the impact of higher core sales volumes and the impact of the weaker U.S. dollar in 2018 - 25 basis points

• The incremental net dilutive effect in 2018 of acquired businesses - 55 basis points

COST OF SALES AND GROSS PROFIT

	Three-Month Period Ended						Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	4,981.0		$	4,510.1		$	9,676.4		$	8,715.8
Cost of sales	(2,163.9		)	(2,027.8		)	(4,215.7		)	(3,899.2		)
Gross profit	$	2,817.1		$	2,482.3		$	5,460.7		$	4,816.6
Gross profit margin	56.6		%	55.0		%	56.4		%	55.3		%

The year-over-year increase in cost of sales during both the three and six-month periods ended June 29, 2018 as compared to the comparable periods in 2017, is due primarily to the impact of higher year-over-year sales volumes, including sales from recently acquired businesses, partly offset by incremental year-over-year cost savings associated with the restructuring and continued productivity improvement actions taken in 2017.

The year-over-year increase in gross profit margins during both the three and six-month periods ended June 29, 2018 as compared to the comparable periods in 2017, is due primarily to the favorable impact of higher year-over-year sales volumes and the increased leverage of certain manufacturing costs as well as the impact of incremental year-over-year cost savings associated with the restructuring activities and continued productivity improvement actions taken in 2017. Gross profit margins also were positively impacted by the weakness of the U.S. dollar against other major currencies during both the three and six-month periods ended June 29, 2018 as compared to the comparable periods in 2017.

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OPERATING EXPENSES

	Three-Month Period Ended						Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017			June 29, 2018			June 30, 2017
Sales	$	4,981.0		$	4,510.1		$	9,676.4		$	8,715.8
Selling, general and administrative (“SG&A”) expenses	1,637.9			1,522.3			3,239.8			2,972.2
Research and development (“R&D”) expenses	311.7			283.3			610.4			550.7
SG&A as a % of sales	32.9		%	33.8		%	33.5		%	34.1		%
R&D as a % of sales	6.3		%	6.3		%	6.3		%	6.3		%

The year-over-year decrease in SG&A expenses as a percentage of sales for both the three and six-month periods ended June 29, 2018 as compared to the comparable periods in 2017, was driven by the benefit of increased leverage of the Company’s general and administrative cost base resulting from higher 2018 sales volumes and the impact of the restructuring, impairment and other related charges incurred in the second quarter of 2017 related to discontinuing a product line, net of continuing productivity initiatives taken in 2018, partially offset by continued investments in sales and marketing growth initiatives.

Year-over-year, R&D expenses (consisting principally of internal and contract engineering personnel costs) remained constant as a percentage of sales for both the three and six-month periods ended June 29, 2018 as compared to the comparable periods in 2017. Year-over-year increases in spending in the Company’s new product development initiatives corresponded to the increase in sales.

NONOPERATING INCOME (EXPENSE)

As described in Note 1 and Note 8 to the accompanying Condensed Consolidated Financial Statements, in the first quarter of 2018, the Company adopted ASU No. 2017-07, Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The ASU requires the Company to disaggregate the service cost component from the other components of net periodic benefit costs and requires the Company to present the other components of net periodic benefit cost in other income, net. The ASU also requires application on a retrospective basis. The other components of net periodic benefit costs included in other income, net for the three and six-month periods ended June 29, 2018 were $8.3 million and $16.1 million, respectively, compared to $7.0 million and $13.9 million for the three and six-month periods ended June 30, 2017, respectively.

INTEREST COSTS AND FINANCING

For a discussion of the Company’s outstanding indebtedness, refer to Note 7 to the accompanying Consolidated Condensed Financial Statements.

Interest expense of $43 million and $82 million for the three and six-month periods ended June 29, 2018, respectively, was $3 millionhigher and $1 millionhigher than the comparable periods of 2017, respectively, due primarily to higher average interest rates on outstanding borrowings during 2018 as compared with the average interest rates in 2017 and the impact of the weaker U.S. dollar in 2018, partially offset by lower average outstanding U.S. commercial paper borrowings in 2018 compared to 2017.

INCOME TAXES

The following table summarizes the Company’s effective tax rate from continuing operations:

	Three-Month Period Ended				Six-Month Period Ended
	June 29, 2018		June 30, 2017		June 29, 2018		June 30, 2017
Effective tax rate from continuing operations	19.3	%	13.6	%	19.9	%	15.4	%

The Company’s effective tax rate for 2018 was slightly lower than the U.S. federal statutory rate of 21.0%due principally to the impact of the Company’s earnings outside the United States which overall are taxed at rates lower than the U.S. federal rate. The effective tax rate for the three-month period ended June 29, 2018 includes the benefit of a lower U.S. corporate income tax rate of 21.0% from the enactment of the TCJA, partially offset by a new minimum tax on certain non-U.S. earnings. The effective tax rate for the three and six-month periods ended June 29, 2018 also includes net tax benefits of $9 million ($0.01 per diluted share) for release of reserves upon the expiration of statutes of limitation and excess tax benefits from stock-based

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compensation which were partially offset by increases in estimates associated with prior period uncertain tax provisions and other matters.

The Company’s effective tax rate for 2017 differed from the then-effective U.S. federal statutory rate of 35.0% due principally to the Company’s earnings outside the United States which generally are taxed at rates lower than such U.S. federal rate.The effective tax rate for the three-month period endedJune 30, 2017 included a benefit from the release of reserves upon the expiration of statutes of limitations and audit settlements, as well as higher tax benefits from restructuring charges that are predominantly in the United States, which in aggregate decreased the reported tax rate by 6.9%. The effective tax rate for thesix-month period endedJune 30, 2017reflects the aforementioned benefits recorded in the second quarter of 2017and higher than expected benefits recorded in the first quarter of2017related to excess tax benefits from stock-based compensation, which in aggregate reduced the reported tax rate by5.1%.

On December 22, 2017, the TCJA was enacted, substantially changing the U.S. tax system and affecting the Company in a number of ways. Notably, the TCJA:

• establishes a flat corporate income tax rate of 21.0% on U.S. earnings;

• imposes a one-time tax on unremitted cumulative non-U.S. earnings of foreign subsidiaries (“Transition Tax”);

• imposes a new minimum tax on certain non-U.S. earnings, irrespective of the territorial system of taxation, and generally allows for the repatriation of future earnings of foreign subsidiaries without incurring additional U.S. taxes by transitioning to a territorial system of taxation (“GILTI Tax”);

• subjects certain payments made by a U.S. company to a related foreign company to certain minimum taxes (Base Erosion Anti-Abuse Tax);

• eliminates certain prior tax incentives for manufacturing in the United States and creates an incentive for U.S. companies to sell, lease or license goods and services abroad by allowing for a reduction in taxes owed on earnings related to such sales;

• allows the cost of investments in certain depreciable assets acquired and placed in service after September 27, 2017 to be immediately expensed; and

• reduces deductions with respect to certain compensation paid to specified executive officers.

As U.S. GAAP accounting for income taxes requires the effect of a change in tax laws or rates to be recognized in income from continuing operations for the period that includes the enactment date, the Company recognized an estimate of the impact of the TCJA in the year ended December 31, 2017. As a result of the TCJA, the Company recognized a provisional tax liability of approximately $1.2 billion in 2017 for the Transition Tax, which is payable over a period of eight years. The Company also remeasured U.S. deferred tax assets and liabilities based on the income tax rates at which the deferred tax assets and liabilities are expected to reverse in the future (generally 21.0%), resulting in an income tax benefit of approximately $1.2 billion in 2017. For a description of the impact of the TCJA for the year ended December 31, 2017 reference is made to Note 12 of the Company’s financial statements as of and for the year ended December 31, 2017 included in the Company’s 2017 Annual Report.

Due to the complexities involved in accounting for the enactment of the TCJA, SAB No. 118 allowed the Company to record provisional amounts in earnings for the year ended December 31, 2017. SAB No. 118 provides that where reasonable estimates can be made, the provisional accounting should be based on such estimates and when no reasonable estimate can be made, the provisional accounting may be based on the tax law in effect before the TCJA. During the three and six-month periods ended June 29, 2018, there were no changes made to the provisional amounts recognized in 2017. The Company continues to analyze the effects of the TCJA on its Consolidated Condensed Financial Statements. Additional impacts from the enactment of the TCJA will be recorded as they are identified during the measurement period as provided for in SAB No. 118, which extends up to one year from the enactment date. The final impact of the TCJA may differ from the provisional amounts that have been recognized, possibly materially, due to, among other things, changes in the Company’s interpretation of the TCJA, legislative or administrative actions to clarify the intent of the statutory language provided that differ from the Company’s current interpretation, any changes in accounting standards for income taxes or related interpretations in response to the TCJA, or any updates or changes to estimates utilized to calculate the impacts, including changes to current year earnings estimates and applicable foreign exchange rates. Additionally, the Company’s U.S. tax returns for 2017 will be filed during the fourth quarter of 2018 and any changes to the tax positions for temporary differences compared to the estimates used will result in an adjustment of the estimated tax benefit recorded as of December 31, 2017. 

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The Company also continues to evaluate the impact of the GILTI provisions under the TCJA which are complex and subject to continuing regulatory interpretation by the IRS. The Company is required to make an accounting policy election of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company’s accounting policy election with respect to the new GILTI Tax rules will depend, in part, on analyzing its global income to determine whether it can reasonably estimate the tax impact. While the Company has included an estimate of GILTI in its estimated effective tax rate for 2018, it has not completed its analysis and has not determined which method to elect. Adjustments related to the amount of GILTI Tax recorded in its Consolidated Condensed Financial Statements may be required based on the outcome of this election.

The Company conducts business globally, and files numerous consolidated and separate income tax returns in federal, state and foreign jurisdictions. The non-U.S. countries in which the Company has a significant presence include China, Denmark, Germany, Singapore, Switzerland and the United Kingdom. The Company believes that a change in the statutory tax rate of any individual foreign country would not have a material effect on the Company’s financial statements given the geographical dispersion of the Company’s taxable income.

The Company and its subsidiaries are routinely examined by various domestic and international taxing authorities. The IRS has completed the examinations of substantially all of the Company’s federal income tax returns through 2011 and is currently examining certain of the Company’s federal income tax returns for 2012 through 2015. In addition, the Company has subsidiaries in Austria, Belgium, Canada, China, Denmark, Finland, France, Germany, Hong Kong, India, Italy, Japan, New Zealand, Sweden, Switzerland and the United Kingdom and various other countries, states and provinces that are currently under audit for years ranging from 2004 through 2016.

Tax authorities in Denmark have raised significant issues related to interest accrued by certain of the Company’s subsidiaries. On December 10, 2013, the Company received assessments from the Danish tax authority totaling approximatelyDKK 1.6 billion including interest through June 29, 2018 (approximately $245 million based on the exchange rate as ofJune 29, 2018), imposing withholding tax relating to interest accrued in Denmark on borrowings from certain of the Company’s subsidiaries for the years 2004-2009. The Company is currently in discussions with SKAT and anticipates receiving an assessment for years 2010-2012 totaling approximately DKK 924 million including interest through June 29, 2018 (approximately $145 million based on the exchange rate as of June 29, 2018). Management believes the positions the Company has taken in Denmark are in accordance with the relevant tax laws and is vigorously defending its positions. The Company appealed these assessments to the National Tax Tribunal in 2014 and intends on pursuing this matter through the European Court of Justice should this appeal be unsuccessful. The ultimate resolution of this matter is uncertain, could take many years, and could result in a material adverse impact to the Company’s consolidated financial statements, including its effective tax rate.

Excluding discrete tax adjustments, the Company’s year-to-date effective tax rate was 20.4%. The Company’s effective tax rate could vary as a result of many factors, including but not limited to the following:

• The expected rate for the remainder of 2018 includes the anticipated discrete income tax benefits from excess tax deductions related to the Company’s stock compensation programs, which are reflected as a reduction in tax expense, though the actual benefits (if any) will depend on the Company’s stock price and stock option exercise patterns.

• The actual mix of earnings by jurisdiction could fluctuate from the Company’s projection.

• The tax effects of other discrete items, including accruals related to tax contingencies, the resolution of worldwide tax matters, tax audit settlements, statute of limitations expirations and changes in tax regulations.

• Any future legislative changes or potential tax reform, the impact of future regulations and guidance implementing the TCJA and any related additional tax planning efforts to address these changes.

As a result of the uncertainty in predicting these items, it is reasonably possible that the actual effective tax rate used for financial reporting purposes will change in future periods.

In the six-month period ended June 30, 2017, the Company recorded a $22 million income tax benefit related to the release of previously provided reserves associated with uncertain tax positions on certain Danaher tax returns which were jointly filed with Fortive entities. These reserves were released due to the expiration of statutes of limitations for those returns. This income tax benefit was included in earnings from discontinued operations in the accompanying Consolidated Condensed Statement of Earnings.

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COMPREHENSIVE INCOME

For the three and six-month periods ended June 29, 2018, comprehensive income decreased$809 million and $764 million, respectively, as compared to the comparable periods of 2017. These declines were primarily due to the losses from foreign currency translation adjustments in the three and six-month periods ended June 29, 2018 as compared to the gains from foreign currency translation adjustments realized in the comparable periods of 2017 partially offset by higher net earnings in the three and six-month periods ended June 29, 2018. For the three and six-month periods ended June 29, 2018, the Company recorded a foreign currency translation loss of $641 million and $347 million, respectively, as compared to a translation gain of $275 million and $579 million for the three and six-month periods ended June 30, 2017, respectively.

INFLATION

The effect of inflation on the Company’s revenues and net earnings was not significant in the three and six-month periods ended June 29, 2018.

LIQUIDITY AND CAPITAL RESOURCES

Management assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. The Company continues to generate substantial cash from operating activities and forecasts that its operating cash flow and other sources of liquidity will be sufficient to allow it to continue investing in existing businesses, consummating strategic acquisitions and investments, paying interest and servicing debt and managing its capital structure on a short and long-term basis.

Following is an overview of the Company’s cash flows and liquidity ($ in millions):

Overview of Cash Flows and Liquidity

	Six-Month Period Ended
($ in millions)	June 29, 2018			June 30, 2017
Total operating cash flows provided by continuing operations	$	1,864.9		$	1,570.7
Cash paid for acquisitions	$	(2,067.8	)	$	(93.9	)
Payments for additions to property, plant and equipment	(291.7		)	(306.5		)
Proceeds from sales of property, plant and equipment	1.4			30.0
Proceeds from sale of investments	22.1			—
All other investing activities	(29.3		)	(2.5		)
Net operating cash used in investing activities	$	(2,365.3	)	$	(372.9	)
Proceeds from the issuance of common stock	$	49.7		$	35.8
Payment of dividends	(209.3		)	(183.9		)
Payment for purchase of noncontrolling interests	—			(64.4		)
Net proceeds from (repayments of) borrowings (maturities of 90 days or less)	1,030.1			(2,387.5		)
Proceeds from borrowings (maturities longer than 90 days)	—			1,684.0
Repayments of borrowings (maturities longer than 90 days)	(3.9		)	(562.4		)
All other financing activities	(16.2		)	(37.3		)
Net operating cash provided by (used in) financing activities	$	850.4		$	(1,515.7	)

• Operating cash flows from continuing operations increased$294 million, or approximately 19%, during the first six months of 2018 as compared to the first six months of 2017, primarily due to higher earnings and higher cash provided by trade accounts receivable, inventories and accounts payable during the period compared to the prior year.

• On March 23, 2018, Danaher entered into the 364-Day Facility which provides liquidity support for an expansion of Danaher’s U.S. and euro-denominated commercial paper programs and for general corporate purposes. Danaher used proceeds from the issuance of U.S. dollar and euro-denominated commercial paper to fund a portion of the purchase price for the acquisition of IDT in April 2018.

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• As of June 29, 2018, the Company held $904 million of cash and cash equivalents.

Operating Activities

Cash flows from operating activities can fluctuate significantly from period-to-period as working capital needs and the timing of payments for income taxes, restructuring activities, pension funding and other items impact reported cash flows.

Operating cash flows from continuing operations were $1.9 billion for the first six months of 2018, an increase of $294 million, or approximately 19%, as compared to the comparable period of 2017. The year-over-year change in operating cash flows from 2017 to 2018 was primarily attributable to the following factors:

• 2018 operating cash flows reflected an increase of $199 million in net earnings from continuing operations for the first six months of 2018 as compared to the comparable period in 2017.

• Net earnings from continuing operations for the first six months of 2018 reflected an increase of $47 million of depreciation and amortization expense as compared to the comparable period of 2017. Amortization expense primarily relates to the amortization of intangible assets acquired in connection with acquisitions and increased due to recently acquired businesses. Depreciation expense relates to both the Company’s manufacturing and operating facilities as well as instrumentation leased to customers under operating-type lease arrangements and increased due primarily to the impact of increased capital expenditures. Depreciation and amortization are noncash expenses that decrease earnings without a corresponding impact to operating cash flows.

• The aggregate of trade accounts receivable, inventories and trade accounts payable provided$50 million in operating cash flows during the first six months of 2018, compared to $77 million of operating cash flows used in the comparable period of 2017. The amount of cash flow generated from or used by the aggregate of trade accounts receivable, inventories and trade accounts payable depends upon how effectively the Company manages the cash conversion cycle, which effectively represents the number of days that elapse from the day it pays for the purchase of raw materials and components to the collection of cash from its customers and can be significantly impacted by the timing of collections and payments in a period.

• The aggregate of prepaid expenses and other assets and accrued expenses and other liabilities used$154 million of operating cash flows during the first six months of 2018, compared to $123 millionused in the comparable period of 2017. This use of operational cash flow in the first six months of 2018 resulted primarily from the timing of cash payments for income taxes, various employee-related liabilities, customer funding and accrued expenses during the first six months of 2018 compared to the comparable period of 2017.

Investing Activities

Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures, including instruments leased to customers, cash used for investments and cash proceeds from divestitures of businesses or assets.

Net cash used in investing activities from continuing operations was $2.4 billion during the first six months of 2018 compared to $373 million of cash used in the first six months of 2017. For a discussion of the Company’s acquisitions during the first six months of 2018 refer to “—Overview”.

Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, improving information technology systems and the manufacture of instruments that are used in operating-type lease arrangements that certain of the Company’s businesses enter into with customers. Capital expenditures decreased$15 million on a year-over-year basis for the first six months of 2018 compared to 2017 due to decreased investment in construction of new facilities, partially offset by increases in investments in operating assets at newly acquired businesses such as IDT. For the full year 2018, the Company forecasts capital spending to be approximately $700 million, though actual expenditures will ultimately depend on business conditions.

During the first six months of 2018, the Company received cash proceeds of $22 million from the collection of short-term other receivables related to the sale of certain marketable equity securities during 2017.

Financing Activities and Indebtedness

Cash flows relating to financing activities consist primarily of cash flows associated with the issuance and repayments of commercial paper and other debt, issuance and repurchases of common stock and payments of cash dividends to shareholders. Financing activities from continuing operations provided cash of $850 million during the first six months of 2018 compared to

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approximately $1.5 billion of cash used in the comparable period of 2017. The year-over-year increase in cash provided in financing activities was due primarily to higher net proceeds from commercial paper borrowings in 2018, as the Company issued commercial paper to pay for a portion of the acquisition price of IDT in April 2018. Additionally, lower repayments of long-term debt in the first half of 2018 as compared to the comparable period in 2017 contributed to the cash provided in financing activities. Both of these factors were partially offset by lower proceeds from the issuance of long-term notes in the first half of 2018 as compared to the comparable period of 2017. In addition, the Company paid $64 million to a noncontrolling interest holder in the first quarter of 2017 which contributed to the use of cash from financing activities in the prior period.

For a description of the Company’s outstanding debt as of June 29, 2018, the debt issued and debt repaid during the six-month period ended June 29, 2018 and the Company’s commercial paper programs and credit facilities, refer to Note 7 to the accompanying Consolidated Condensed Financial Statements. As of June 29, 2018, the Company was in compliance with all of its debt covenants.

The Company satisfies any short-term liquidity needs that are not met through operating cash flow and available cash primarily through issuances of commercial paper under its U.S. dollar and euro-denominated commercial paper programs. Credit support for the commercial paper programs is generally provided by the Company’s $4.0 billion Credit Facility and $1.0 billion 364-Day Facility.

As of June 29, 2018, Danaher had the ability to incur an additional approximately $1.6 billion of indebtedness in direct borrowings under the Credit Facility, 364-Day Facility or under outstanding commercial paper facilities (based on aggregate amounts available under the Credit Facility and 364-Day Facility that were not being used to backstop outstanding commercial paper balances).

The Company has classified $500 million of the 2018 U.S. Notes and approximately $3.4 billion of its borrowings outstanding under the commercial paper programs as of June 29, 2018 as long-term debt in the accompanying Consolidated Condensed Balance Sheet as the Company had the intent and ability, as supported by availability under the Credit Facility, to refinance these borrowings for at least one year from the balance sheet date. As commercial paper obligations mature, the Company may issue additional short-term commercial paper obligations to refinance all or part of these borrowings.

Stock Repurchase Program

For information regarding the Company’s stock repurchase program, please see Part II—Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds,” in this Form 10-Q.

Dividends

Aggregate cash payments for dividends during the first six months of 2018 were $209 million. The increase over the comparable period of 2017 results from increases in the quarterly dividend rate effective with respect to the dividend paid in the second quarter of 2017 and with respect to the dividend paid in the second quarter of 2018.

In the second quarter of 2018, the Company declared a regular quarterly dividend of $0.16 per share payable on July 27, 2018 to holders of record on June 29, 2018, reflecting a 14% increase in the per share amount of the Company’s quarterly dividend compared to the second quarter of 2017.

Cash and Cash Requirements

As of June 29, 2018, the Company held $904 million of cash and cash equivalents that were held on deposit with financial institutions or invested in highly liquid investment-grade debt instruments with a maturity of 90 days or less with an approximate weighted average annual interest rate of 0.9%. Of this amount, $148 million was held within the United States and $756 million was held outside of the United States. The Company will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund its restructuring activities and pension plans as required, pay dividends to shareholders, repurchase shares of the Company’s common stock and support other business needs.

The Company generally intends to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, the Company may also borrow under its commercial paper programs or the credit facilities, enter into new credit facilities and either borrow directly thereunder or use such credit facilities to backstop additional borrowing capacity under its commercial paper programs and/or access the capital markets. The Company used a combination of available cash and proceeds from the issuance of commercial paper (which was supported in part by the 364-Day Facility the Company entered into in March 2018) to finance the acquisition of IDT in April

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2018. The Company also may from time to time access the capital markets to take advantage of favorable interest rate environments or other market conditions. With respect to the Company’s commercial paper and notes scheduled to mature during the remainder of 2018, the Company expects to repay the principal amounts when due using available cash, proceeds from the issuance of commercial paper and/or proceeds from other debt issuances.

While repatriation of some cash held outside the United States may be restricted by local laws, most of the Company’s foreign cash could be repatriated to the United States. Following enactment of the TCJA and the associated Transition Tax, in general, repatriation of cash to the United States can be completed with no incremental U.S. tax; however, repatriation of cash could subject the Company to non-U.S. jurisdictional taxes on distributions. The cash that the Company’s non-U.S. subsidiaries hold for indefinite reinvestment is generally used to finance foreign operations and investments, including acquisitions. The income taxes, if any, applicable to such earnings including basis differences in our foreign subsidiaries are not readily determinable. The Company continues to evaluate the impact of the TCJA on its election to indefinitely reinvest certain of its non-U.S. earnings. As of June 29, 2018, management forecasts that it has sufficient liquidity to satisfy its cash needs, including its cash needs in the United States.

During 2018, the Company’s cash contribution requirements for its U.S. and non-U.S. defined benefit pension plans are forecasted to be approximately $30 million and $55 million, respectively. The ultimate amounts to be contributed depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors.

CRITICAL ACCOUNTING ESTIMATES

Except as set forth below in connection with the adoption of ASC 606, there have been no changes to the Company’s critical accounting estimates described in the Annual Report on Form 10-K for the year ended December 31, 2017 that have a material impact on the Company’s Consolidated Condensed Financial Statements and the related Notes.

Revenue Recognition—The Company derives revenues from the sale of products and services. Refer to Note 1 to the accompanying Consolidated Condensed Financial Statements for a description of the Company’s revenue recognition policies.

Although most of the Company’s sales agreements contain standard terms and conditions, certain agreements contain multiple products or services or nonstandard terms and conditions. As a result, judgment is sometimes required to determine the appropriate accounting, including whether the products or services specified in these agreements should be treated as separate units of accounting for revenue recognition purposes, and, if so, how the consideration should be allocated among the distinct products or services and when to recognize revenue for each element. The Company allocates the contract’s transaction price at inception of the contract to each performance obligation on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract. The Company’s estimate of standalone selling price impacts the amount and timing of revenue recognized in arrangements with multiple products or services. The Company also enters into lease arrangements with customers, which requires the Company to determine whether the arrangements are operating or sales-type leases. Certain of the Company’s lease contracts are customized for larger customers and often result in complex terms and conditions that typically require significant judgment in applying the lease accounting criteria.

If the Company’s judgments regarding revenue recognition prove incorrect, the Company’s reported revenues in particular periods may be adversely affected.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Instruments and Risk Management,” in the Company’s 2017 Annual Report. There were no material changes during the quarter ended June 29, 2018 to this information reported in the Company’s 2017 Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the Company’s President and Chief Executive Officer, and Executive Vice President and Chief Financial Officer, have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

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There have been no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Company’s most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In September 2016, the U.S. Environmental Protection Agency (“EPA”) issued a Notice of Violation to the Richmond, Illinois facility of Leica Biosystems Richmond, Inc. (“Leica Biosystems”), an indirect subsidiary of the Company, alleging that the facility violated certain provisions of the Clean Air Act and related regulations pertaining to permitting requirements, emissions limitations and the installation and use of proper controls.  In December 2017, Leica Biosystems and the EPA reached an agreement in principle on an agency administrative settlement whereby all of Leica Biosystems’ alleged violations would be settled for a payment of approximately $175 thousand and certain injunctive relief.  The parties expect to reflect the terms of the agreement in principle in an administrative order.  The Company does not believe that the final resolution of this matter will have a material adverse effect on the Company’s results of operations, cash flow or financial condition.

For additional information regarding legal proceedings, refer to the section titled “Legal Proceedings” in MD&A in the 2017 Consolidated Financial Statements.

ITEM 1A. RISK FACTORS

Information regarding risk factors can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Information Related to Forward-Looking Statements,” in Part I—Item 2 of this Form 10-Q and in Part I—Item 1A of Danaher’s 2017 Annual Report. There were no material changes during the quarter ended June 29, 2018 to the risk factors reported in the Company’s 2017 Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Neither the Company nor any “affiliated purchaser” repurchased any shares of Company common stock during the six-month period ended June 29, 2018.  On July 16, 2013, the Company’s Board of Directors approved a repurchase program (the “Repurchase Program”) authorizing the repurchase of up to 20 million shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions. There is no expiration date for the Repurchase Program, and the timing and amount of any shares repurchased under the program will be determined by the Company’s management based on its evaluation of market conditions and other factors.  The Repurchase Program may be suspended or discontinued at any time.  Any repurchased shares will be available for use in connection with the Company’s equity compensation plans (or any successor plans) and for other corporate purposes. As of June 29, 2018, 20 million shares remained available for repurchase pursuant to the Repurchase Program. The Company expects to fund any future stock repurchases using the Company’s available cash balances or proceeds from the issuance of debt.

During the second quarter of 2018, holders of certain of the Company’s Liquid Yield Option Notes due 2021 (“LYONs”) converted such LYONs into an aggregate of 128 thousand shares of Danaher common stock, par value $0.01 per share. In each case, the shares of common stock were issued solely to existing security holders upon conversion of the LYONs pursuant to the exemption from registration provided under Section 3(a)(9) of the Securities Act of 1933, as amended.

During the second quarter of 2018, Danaher issued an aggregate of 243 thousand shares of Danaher common stock to certain Danaher employees in a private placement pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933, as amended, for total consideration of $24 million.

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ITEM 6. EXHIBITS

(a) Exhibits:

3.1	Restated Certificate of Incorporation of Danaher Corporation (incorporated by reference from Exhibit 3.1 to Danaher Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 29, 2012 (Commission File Number: 1-8089))
3.2	Amended and Restated By-laws of Danaher Corporation (incorporated by reference from Exhibit 3.2 to Danaher Corporation’s Current Report on Form 8-K filed December 6, 2016 (Commission File Number: 1-8089))
11.1	Computation of per-share earnings (See Note 13, “Net Earnings Per Share from Continuing Operations”, to the Consolidated Condensed Financial Statements)
12.1	Calculation of ratio of earnings to fixed charges
31.1	Certification of Chief Executive Officer Pursuant to Item 601(b)(31) of Regulation S-K, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Item 601(b)(31) of Regulation S-K, As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document **
101.SCH	XBRL Taxonomy Extension Schema Document **
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document **
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document **
101.LAB	XBRL Taxonomy Extension Label Linkbase Document **
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document **

** Attached as Exhibit 101 to this report are the following documents formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Condensed Balance Sheets as of June 29, 2018 and December 31, 2017, (ii) Consolidated Condensed Statements of Earnings for the three and six-month periods ended June 29, 2018 and June 30, 2017, (iii) Consolidated Condensed Statements of Comprehensive Income for the three and six-month periods ended June 29, 2018 and June 30, 2017, (iv) Consolidated Condensed Statement of Stockholders’ Equity for the six-month period ended June 29, 2018, (v) Consolidated Condensed Statements of Cash Flows for the six-month periods ended June 29, 2018 and June 30, 2017, and (vi) Notes to Consolidated Condensed Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		DANAHER CORPORATION
Date:	July 18, 2018	By:	/s/ Daniel L. Comas
			Daniel L. Comas
			Executive Vice President and Chief Financial Officer
Date:	July 18, 2018	By:	/s/ Robert S. Lutz
			Robert S. Lutz
			Senior Vice President and Chief Accounting Officer

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